Reckitt

Annual Report and Accounts 2020

BUILDING
SHARED
SUCCESS
WELCOME
Contents

Strategic Report
01 Financial highlights
02 At a glance
04 Chairman’s statement
06 Chief Executive Officer’s statement
08 Talking to our business leaders

OUR
10 Our business model
12 Purpose-led growth
14 Mapping what matters to our stakeholders
16 Our markets and megatrends

PURPOSE
18 Delivering our strategy
24 Key performance indicators
28 Our consumers
32 Our customers
36 Our investors
We exist to protect, heal and nurture in the 40 Our people

relentless pursuit of a cleaner and healthier world. 44 Our partners

48 Our communities

OUR
52 Our environment
56 Non-financial information statement
58 s172 statement

FIGHT
62 Operating review: Hygiene
66 Operating review: Health
70 Operating review: Nutrition
74 Group financial review
80 Risk management
93 Viability statement
We have a fight on our hands. A fight to make access
to the highest quality hygiene, wellness and nourishment Governance
a right and not a privilege. 94 Board of Directors
99 Group Executive Committee
102 Corporate governance report
About our new brand 113 Nomination Committee report
119 Audit Committee report
Reckitt branding reflects the purpose, fight, compass and
128 CRSEC Committee report
behaviours of the company. Our new identity draws on our rich
134 Directors’ remuneration report
200 year heritage. It symbolises the energy and can-do spirit of
our people and the positive impact that they create on the world. 158 Report of the Directors
Designed to be accessible, active and authentic; Reckitt is inspired 161 Statement of Directors’ responsibilities
by our purpose-led brands, and our efforts for a healthier planet
and a fairer society. Financial Statements
162 Independent auditor’s report
174 Financial statements
To learn more visit: www.reckitt.com/thisisreckitt
237 Shareholder information

PG 62
Hygiene
PG
Health
66 PG 70
Nutrition
 S T R AT E G I C R E P O R T G OV E R N A N CE F I N A N C I A L S TAT E M E N T S

Financial highlights

14.0bn 23.6% 15.4%

Net Revenue Adjusted Operating Margin4 Reported Operating Margin

£
+11.8% LFL growth4 -260bps nm 3
Reported growth +8.9%

42% 35% 23%

Hygiene Health Nutrition

of Reckitt Total Net Revenue of Reckitt Total Net Revenue of Reckitt Total Net Revenue

327.0p 159.3p 174.6p

Adjusted Earnings Per Share (diluted)4 Reported Earnings Per Share (diluted) Total dividend for the year

-6.3% nm 3 unchanged

Society
Net Revenue from more Number of people informed through FTSE4Good Index membership
sustainable products1, 2, 4 health and hygiene messaging and

30.4% 1.41bn 17
campaigns since 2013

consecutive years, including meeting

20 additional Breast-Milk-Substitute
(BMS) criteria since 2018

Environment
Greenhouse Gas emissions Water use per unit of production1 1. Excluding our Infant and Child Nutrition (IFCN)

53% 39%
per unit of production1 business – see Reckitt insights (www.reckitt.com/
responsibility/policies-and-reports) for details
2. Calculated for 12 months ending 30 September 2020
3. Not meaningful
4. Non-GAAP measures are defined on page 77

reduction since 2012 reduction since 2012

Reckitt Annual Report and Accounts 2020 01

 AT A G L A N C E

HYGIENE
Our Group is divided into three business
units – Hygiene, Health and Nutrition –
with each operating across attractive
and growing segments.

Our portfolio is underpinned by five global Hygiene is the foundation of health and our purpose-led portfolio works
megatrends that drive demand for our to eliminate dirt, germs, pests and odours with market leading products
such as Lysol, Finish, Mortein and AirWick.
products. As a result, we are well positioned
to benefit as we recover from COVID-19,
and to deliver sustainable mid-single digit
growth in the medium to long-term.
Hygiene Net Revenue

5,816m £5,031m
2020 2019

+19.5% +15.6%
LFL Growth1 Actual Growth

£1,505m 25.9%
Adjusted Operating Profit1 Adjusted Operating Margin1

Geographic profile

Developed markets 79%

Developing markets 21%

Key Hygiene brands

02 Reckitt Annual Report and Accounts 2020

 S T R AT E G I C R E P O R T G OV E R N A N CE F I N A N C I A L S TAT E M E N T S

HEALTH
Our Health portfolio brings compelling, innovative solutions that provide
pain relief, protection, hygiene, and personal care to households across
the world, through brands like Dettol, Durex, Gaviscon, Nurofen, Mucinex,
Strepsils and Veet.
NUTRITION
The Nutrition business includes our leading infant and child nutrition,
adult nutrition and our range of vitamins, minerals and supplements. Brands
include Airborne, Mead Johnson, Move Free and Schiff. The strength of this
business is its focus on science-led innovations which underpin products
catering to consumers from infant through to the elderly.

Health Net Revenue Nutrition Net Revenue

4,890m £4,462m £3,287m £3,353m

2020 2019 2020 2019

+12.1% +9.6% -2.0%

LFL Growth1 Actual Growth LFL Growth1 Actual Growth

UNCHANGED

£1,334m 27.3% £462m 14.1%

Adjusted Operating Profit1 Adjusted Operating Margin1 Adjusted Operating Profit1 Adjusted Operating Margin1

Geographic profile Geographic profile

Developed markets 54% Developed markets 45%

Developing markets 46% Developing markets 55%

Key Health brands Key Nutrition brands

1. Non-GAAP measures are defined on page 77

Reckitt Annual Report and Accounts 2020 03

 C H A I R M A N ’ S S TAT E M E N T

I am proud of what we were able to achieve this

year in the face of some enormous challenges.
Reckitt is emerging much stronger, as a more
resilient and purposeful company.
We made significant progress in 2020 in
building the foundations for future growth.
We have added exceptional leadership talent
at the top of Reckitt and across many of our
geographies to help steer the company through
this transformational stage. We are investing
in capabilities and have organised ourselves
to become more focused and purpose-led.

Business performance
Full year net revenue was £13,993m, with growth
of +11.8% on a like-for-like basis. This was
underpinned by strong performances from both
Hygiene and Health; despite mixed markets,
Nutrition also made good operational
improvements while separating from Health and
integrating Vitamins, Minerals and Supplements.
The performance uplift reflected the
outstanding way our teams responded
to the coronavirus pandemic (COVID-19),
meeting the substantially increased demand

MOVING
for some of our brands through sharper
execution, expanded capacity and better
customer service. Together with our ongoing
investment in our digital capabilities, this
enabled us to deliver a stronger underlying
performance across our portfolio of brands.
Adjusted operating profit was £3,301m,

FORWARD
at an adjusted operating margin of 23.6%,
down 260bps on last year in line with our
guidance and reflecting planned investment
across many areas as laid out by Laxman in
the strategy presentation in February 2020.
Our business made solid progress on

TOGETHER
many fronts. It is an early indicator that the
strategy announced last February is gaining
momentum and yielding positive results.
We remain focused on delivering our
strategy. Although it is too soon to be definitive,
we believe that much of the additional demand

WITH PURPOSE
we saw during 2020 for our Hygiene and Health
brands is likely to be sustained even after
the pandemic. We are accordingly investing
in additional capacity and in expanding our
Hygiene and disinfection business into new
geographies and business segments.
For our Nutrition business, we delivered good
growth in North America and from our Vitamins,
Minerals and Supplements portfolio, although the
operating environment in China continues to be
challenging for our infant formula products. As
a result, Laxman and the team are conducting a
strategic review of our infant formula activities
in China and we’ll act on the conclusions of this
in due course. In the meantime, our focus is on
sustaining the wider investments for growth
that have already started to yield benefits with
renewed innovation, such as our first adult
nutrition product, launched in December.
Governance and risk management have
Chris Sinclair been important areas of focus for the Board
over the last few years. We have done a lot
Chairman

04 Reckitt Annual Report and Accounts 2020

 S T R AT E G I C R E P O R T
of work through the Corporate Responsibility,
Sustainability, Ethics and Compliance Committee
to broaden and deepen our approach to
managing safety and compliance risk, and to
focus on our sustainability agenda. We continue
to expand the investments and initiatives
that enhance the safety and efficacy of our
products, as well as their sustainability.
Consistent with the expectations we set
out last year, the Directors have proposed
a final dividend of 101.6 pence per share,
which when added to the interim dividend
of 73 pence, gives a full‑year dividend of
174.6 pence per share. Subject to shareholder
approval at the AGM in May 2021, this will
be paid on 14 June 2021 to shareholders
who were on the register on 7 May 2021.
AGM
Whilst our Annual General Meetings (AGM)
are normally held as physical meetings with
shareholders encouraged to attend, due to
COVID-19 restrictions, in 2020 we recommended
that shareholders refrain from attending the
AGM in person, in line with guidance from the UK
government at the time. Our 2020 AGM was held
as a closed meeting, with a live virtual webcast
which shareholders were able to view online.
For this year’s AGM, currently planned
for 28 May 2021, we are proposing a similar
format, with the addition of a live Q&A to
allow the Board to interact directly with
shareholders. The safety of our shareholders,
Directors, employees, and other stakeholders
is of the utmost importance to us.
At this year’s AGM, we will be proposing an
additional special resolution to adopt amended
Articles of Association of the company,
giving us the flexibility to hold a hybrid AGM
going forward, if deemed necessary. Further
details are set out in the Notice of Annual
General Meeting available on www.reckitt.
com/investors/your-shareholding/agm/.
Implementing our strategy
In 2020, the safety of employees and the
continued supply of products, especially those
critical to combat the spread of COVID-19
were the key priorities. At the same time, we
were able to grow and develop the business.
While we face another year of uncertainty with
the continued global pandemic and economic
disruption, we remain focused on executing
our strategic priorities and embedding our
cultural transformation.
We made rapid progress on multiple fronts
during 2020. The fact we have been able
to achieve so much in a COVID-19-affected
year attests to an exceptionally strong team
performance and the dedication of our
employees across the world as they have
risen to the challenges. Without their efforts,
our contribution to managing the pandemic
would have been much more limited.
We saw significantly increased consumer
demand, especially for our Dettol, Lysol,
Finish and Airborne brands. This presented
G OV E R N A N CE
considerable opportunities, but it also posed
some major challenges during a global
pandemic. Our factories, suppliers and logistics
operations had to contend with social distancing
and quarantine constraints, which were often
imposed at very short notice. This added to the
complexity of stepping up supplies. I am proud
to say that our people rose to the challenge.
They responded with flexibility, commitment
and Reckitt’s characteristic, can-do spirit.
These efforts allowed us to scale up our
product supply dramatically in critical areas.
We strengthened our global supply chain and
improved customer service levels. We continued
to make good strides in digital and e-commerce
and are now building a competitive advantage
in this arena. And we also managed the
successful launch of an entirely new business
line. Our professional services offering, Global
Business Solutions, is already demonstrating
strong growth potential, including exciting
partnerships with transport and hotel groups.
Meanwhile, we have been pursuing the
organisational and cultural transformation
programme outlined in the strategy we
published in February 2020. The July
restructuring into three Global Business Units
added focus and sharpened execution.
Talent and culture
The Board is very encouraged by the rapid
progress we have made this year in terms of
talent and culture. We have a new leadership
team in place and have strengthened
skills in numerous key areas, notably digital
capabilities, sales excellence, and supply chain
management. Our workforce has shown
itself to be adaptable and highly effective
in very testing conditions. Their resilience
and commitment have brought tangible
improvements to execution across the Group.
Laxman and his leadership team have also
crafted a very coherent and powerful cultural
agenda founded on purpose and responsibility.
This has helped unite and inspire colleagues.
Our purpose encapsulates why we exist and
what we aspire to achieve as an organisation.
Our fight adds urgency to that, and our compass
guides our actions. Early indications are that
these have been extremely well received both
within the Group and by external stakeholders.
We are investing significant energy
and resources in our sustainability agenda.
Sustainability is an integral part of our long-
term sustainable growth business strategy
and intrinsic to our identity as a responsible,
purpose-led business that aims to make a
positive difference in the world. This focus on
sustainability resonates with stakeholders and is
warmly embraced by our workforce. Employee
surveys during 2020 confirmed that our people
are proud to work for Reckitt and this is reflected
by the level of commitment they have shown.
Changes to the Board
I have said already how proud I am of
everything that the leadership team and our
Reckitt Annual Report and Accounts 2020
F I N A N C I A L S TAT E M E N T S
colleagues worldwide have been able to
achieve in difficult times. That goes equally
for my fellow Directors. The company is very
fortunate to have highly talented individuals
on the Board who are committed to Reckitt
and passionate about its purpose.
We welcomed two new Non-Executive
Directors this year who are already making
valuable contributions to our deliberations.
Margherita Della Valle joined us in July 2020
and also became a member of the Audit
Committee. Margherita has extensive
experience of financial markets and digital
technologies and has been instrumental
in business transformation programmes in
her prior roles. Her sectoral expertise and
insights bring fresh perspectives, which have
broadened the Board’s base of experience.
In December 2020, we announced that
Olivier Bohuon would join the Board and the
Remuneration Committee in January 2021. Olivier
spent many years as a successful CEO of a large
global company. He has deep experience in
healthcare products and markets and his insights
will enrich and inform the Board’s discussions.
After a decade at the company, Warren
Tucker retired from the Board and Audit
Committee at the conclusion of our AGM on
12 May 2020. My thanks go to Warren for his
sage advice and wise counsel. The Board will
miss his committed and constructive presence.
We wish him well in his future endeavours.
As we announced last year, I am delighted
to welcome back Reckitt alumnus, Jeff Carr,
who rejoined the company as its Chief Financial
Officer in April 2020. He succeeded Adrian
Hennah who stepped down as CFO in April and
retired in October 2020, following a transition to
Jeff. I would like to thank Adrian for his valued
service and many contributions. Jeff has a
strong track record of transformational strategic
and operational leadership and is playing a
key role in Reckitt’s strategic transformation.
Conclusion
Looking ahead, we remain committed to the
strategic priorities laid out last February. The
appropriateness of these priorities has been
reinforced and validated by what we have seen
during the pandemic. We believe we have set
ourselves the right objectives. We now need to
ensure that our execution delivers strong,
sustainable performance.
We are sharpening our portfolio and
strengthening the organisation to be able
to compete and innovate more effectively.
We are making real progress on managing
the business responsibly and sustainably.
Ultimately, we aim to deliver consistently
strong returns for shareholders by meeting
stakeholder priorities, and we are well-
placed to achieve that ambition. I am
optimistic about Reckitt’s future as a high-
performing, purpose-led business.
05
 C H I E F E X E C U T I V E O F F I C E R ’ S S TAT E M E N T

We delivered
very strong revenue
performance in 2020,
with nearly £14 billion
of sales and 11.8%
Like-for-Like growth.

Overview
In February 2020, we set out our strategy for
rejuvenating sustainable growth at Reckitt,
and outlined our medium-term financial
targets. Our objective is to rebuild Like-for-Like
revenue growth to the mid-single digit range,
and to deliver operating margins in the mid
20’s by the mid-20s, in turn driving earnings
per share growth in the region of 7-9%.

A BETTER HOUSE
Underpinning our expectations are
five megatrends that drive market growth
and a portfolio of trusted brands, with a
strong heritage. Many of the fundamental
capabilities were already in place: we have a
good science and innovation, great people,
a strong performance culture and great

IN A GREAT
e-commerce capabilities. But there were
areas which required improvement. Until
2020 our commercial execution had been
deteriorating, our supply chain was not as
resilient as it should have been, and we were
letting customers down too frequently.

NEIGHBOURHOOD
At the time, I described the business as a
good house in a great neighbourhood. Since
then, we’ve made record levels of investment,
improved execution and customer service and
have made good progress towards becoming
a great house again.
Throughout 2020, we delivered a strong
start to our plan by executing well against our
strategic goals and responding successfully to
rapidly changing market conditions. This has
resulted in a very strong financial performance,
well ahead of our original expectations. In
addition, we have delivered a step-change
in the scale and scope of our business. This
has reinforced the strength our growth
opportunities, and the relevance of the
investments we are making to capture these.

2020 performance
We delivered very strong revenue performance
in 2020, with nearly £14 billion of sales and 11.8%
Like-for-Like growth. In Hygiene, we delivered
excellent growth by increasing capacity to meet
the strong demand for Lysol, while a number of
other brands also saw significantly greater
demand driven by ‘nesting’ behaviours. Our
Health business saw some dynamic trading, led
Laxman Narasimhan by sustained strong demand for Dettol, which
Chief Executive Officer showed similar trends to Lysol. Our Sexual

06 Reckitt Annual Report and Accounts 2020

 S T R AT E G I C R E P O R T
Wellbeing segment improved in the second
half of the year as social distancing restrictions
related to COVID-19 eased and we benefited
from the launch of our new ultra-thin condom.
This was offset to an extent by trading in
over-the-counter medications, where market
conditions were weaker due to the soft cough,
cold and flu season towards the end of the year.
Finally, our focus in Nutrition was on operational
execution and maintaining market share,
particularly in Greater China where market
conditions were more challenging. This was in
part offset by strong performances in our US
business and our increased focus on vitamins,
minerals and supplements, particularly immunity
and senior nutrition which will support our
longer-term ambitions for this business.
Step-change in our business
The global pandemic has reinforced the
relationship between hygiene and health. A
much greater awareness of the importance of
day-to-day cleanliness and sanitation is now
driving fundamental day-to-day behaviours.
Around the world, this is leading to disinfectants
and anti-bacterial cleaners selling in higher
volumes, gaining more shelf space and
penetrating new categories of cleaning. For
example, growing into laundry sanitation,
expanding in wider surface cleaning – with more
wipes and sprays, and becoming the norm for
hand sanitising. As a result, our leading global
disinfectant brands – Dettol, Lysol and Sagrotan
to name but a few – grew in aggregate by over
60% and have significant room to grow further.
Our teams have driven our success
Our teams have overcome significant hurdles
to increase production of these, and other
products, while staying safe and supporting
their communities. I am humbled to see
first-hand this ‘can-do’ attitude with which
Reckitt is frequently associated. I had learned
much about this prior to my joining the
company around 18 months ago. I am
immensely grateful to our teams around the
world for their hard work and flexibility. Our
purpose, to protect, heal and nurture in the
relentless pursuit of a cleaner and healthier
world, has been at the centre of our response
and continues to be as relevant as ever.
Strategic progress in 2020
At the same time, we have invested a record
£745m through the P&L back into the business to
rebuild the long-term capabilities to improve
customer service, to innovate and improve
product quality and to grow purpose-led brands.
Our investment in Centres of Excellence has
already begun to yield results, particularly in the
important area of customer service where we
have meaningfully increased our ability to
support customers – developing the relationship
from being one of transaction, to a fuller
commercial partnership. The annual Advantage
survey of retailers shows that we have made a
material improvement in this area, advancing 9
G OV E R N A N CE
places, moving from the lowest tier to inside the
top 10 of FMCG peers globally, with further
improvements expected over time. Achieving
this while delivering a step-change in capacity
has been very pleasing but there is still much to
do, particularly on our supply chain performance.
On all fronts, we are targeting meaningful further
improvements over the coming years.
We also made the organisational changes
necessary to deliver our strategy. In July, we
established our three focused Global Business
Units and have progressively strengthened
our leadership teams throughout the year.
Furthermore, we have executed successfully
against the drivers of growth: increasing
penetration; optimising market share; entering
new places and entering new spaces. Our
market share performance was growing, led by
Dettol, Lysol, Durex, Finish, our North American
IFCN business and various OTC products,
including Gaviscon. As a result, 70% of our core
Hygiene category market units, and 85% in
Health, held or gained market share in the year.
Dettol and Lysol now generate over £3bn in
combined revenue and are present in over 300
million homes globally. However, our growth in
2020 has been broad-based. Geographically, our
ten largest markets grew by an average of 15%,
and we’ve seen good growth across most of
our categories. Finish has taken significant share,
Airborne’s revenue was up well over 100%, and
we have driven good share gains in Durex where
we launched our first polyurethane (ultra-thin)
condom in China. Innovation and consumer
insight continues to drive share gains in a number
of our categories, and we continue to see
strong opportunities for white space growth.
In e-commerce, our ‘Be Big’, ‘Be Fast’
and ‘Be Bold’ strategies have accelerated
revenue growth to a record 56% in the
year with online sales now representing
c.12% of Group revenue. We are witnessing
fundamental changes to consumer behaviour
as consumers continue to move online.
Underpinning much of our investment in
the business, our productivity programme is
also well ahead of expectations, with savings
of £407m achieved in 2020. As a result, we
have increased this programme and are now
targeting savings of £1.6bn over the period
2020-22, compared to the £1.3bn previously.
Strengthening our environmental
and social ambitions
In addition, we are strengthening our
environmental and social ambitions as our focus
turns from mitigating our negative impacts to
making a net positive contribution through
understanding how we can make things better.
Reflecting this, we announced in June 2020 our
pledge to be carbon neutral by 2040. In addition,
we are committed to powering our operations
with 100% renewable electricity by 2030, with
the ambition of net zero carbon emissions by
2040 – a decade ahead of the global climate
action deadline of 2050 as stipulated in the Paris
Reckitt Annual Report and Accounts 2020
F I N A N C I A L S TAT E M E N T S
Agreement. Equally, we were one of the first
three global companies to sign up to The
Climate Pledge, co-founded in 2019 by
Amazon and Global Optimism. From a societal
perspective, we established the Reckitt Fight
for Access Fund during the year where we have
committed to the equivalent annual investment
of 1% of our Adjusted Operating Profit. This
will help improve access globally by ensuring
high-quality products, providing education
and information and driving availability.
Additionally, we established the Reckitt
Global Hygiene Institute in July 2020, a global
initiative to generate high-quality scientific
research-based evidence to inform public
health recommendations and promote
behaviours that improve global hygiene.
Our business portfolio
When we established our strategy in February
2020, we said that we would be active managers
of the portfolio, seeking to migrate the portfolio
towards higher growth businesses. We have
therefore taken decisive action to strengthen our
portfolio, so that we are better positioned to take
advantage of market growth as we recover from
COVID-19, and in the long-term
Firstly, our infant nutrition business in China
has been operating in challenging conditions,
with declining birth rates, tougher regulations
and increased local competition who have been
investing heavily. Additionally, the pandemic
has brought about the closure of the border
with Hong Kong, preventing any meaningful
cross-border trade. We do not expect the
situation to improve materially in the near term
and so are engaging in a strategic review
of this business. No decision has yet been
taken as to the overall outcome and we will
provide further updates as appropriate.
Additionally, we announced the sale of
Scholl, the footcare brand, after ten years of
ownership and at the same time agreed to
acquire Biofreeze, a leader in over-the-counter
topical pain relief. The brand has a strong
footprint in the North America retail and clinical
channels and a growing international presence.
Looking forward
Overall, recent market developments continue
to support our 4-6% medium-term growth
expectations. In Hygiene, we should grow
around 4-5% as we expect to outperform a
larger and faster growing market for disinfection.
Health should also outperform, with strong
demand for sexual wellbeing products helping
support 4-6% growth. Senior adult nutrition,
and strong growth in VMS should also enable
Nutrition to deliver 3-5% growth in the
medium-term.
2020 was a turning point for Reckitt.
Our performance is strong, we are building
our capabilities, actively managing our
portfolio and transforming our culture. We
expect 2021 to be a year of further strategic
progress and we remain confident that
we will meet our medium-term targets.
07
 TA L K I N G T O O U R B U S I N E S S L E A D E R S
In 2020, we all had to adapt
to new realities. At Reckitt,
we stepped up to play
our part in combatting
the spread of the virus
and we’ve also been hard
at work to progress our
business transformation
plan. I wanted to take stock
with the leadership team at
Laxman Narasimhan
the end of an eventful year.
Chief Executive Officer
Laxman Narasimhan: What are
your thoughts on our performance
in 2020?
Harold van den Broek | President Hygiene
This was an incredible year for hygiene – I
couldn’t be more proud of our people. The
teams understood the importance of good
hygiene as the foundation of good health.
I saw focus, speed, sense of ownership,
ramping up production, asking suppliers
to help with materials and knowledge,
many working 24/7 to make it all happen.
We didn’t fulfil all the demand all the
time, but it wasn’t for lack of trying.
Aditya Sehgal | President Nutrition,
eRB & Greater China
It has really demonstrated the importance of
living our purpose. The strength of our brands
and culture shone through. We displayed
strong agility and we outperformed. The
new focus on nutrition is already making a
difference. And eRB’s performance was
just outstanding. Digital sales were up
by more than 50%. This was really the
year that e-commerce came to the
fore as a key engine of growth.
08 Reckitt Annual Report and Accounts 2020
Kris Licht | President Health &
Chief Customer Officer
I’ve been so impressed by the resilience
and perseverance of our Health team in a
time of great need. We had to rethink and
reprioritise – we dramatically increased our
supply capacity for disinfectants – 37 new
manufacturing locations in one year! And
even though we had to work virtually, we’ve
strengthened retailer partnerships. Given
everything, it’s amazing to me that we executed
so well in year one of our transformation.
Volker Kuhn | Chief Transformation Officer
2020 brought the best out of our people
and teams. I have deep respect for their
tremendous achievements and how they dealt
with unprecedented challenges. Importantly,
we’ve made a strong start to our ambitious
transformation journey. Our organisation has
proved extremely agile. We overdelivered
on business performance and productivity
gains, and I am particularly proud of the speed
and agility we demonstrated in successfully
launching Global Business Solutions. In short,
our people didn’t leave any stone unturned
to satisfy the unprecedented demand of
the pandemic, while strengthening the
foundation of the business for the future.
Rupert Bondy | General Counsel
& Company Secretary
I agree with that. In 2020, going through
a leadership, strategy and culture change
while responding to COVID-19 was definitely
challenging, but it was also energising. It
seemed to bring out the best in our people.
Miguel Veiga-Pestana | Head of Corporate
Affairs & Chief Sustainability Officer
I’m proud of how we’ve collectively
responded and all that we’ve achieved in
these extraordinary times. I’m a particularly
passionate advocate of our purpose, fight and
compass. It’s inspirational and it motivates me
to get up in the morning. We are a purpose-
led, purposeful company with some truly
amazing iconic brands that make a difference
to people’s everyday lives. It was also great
to see us step up in 2020 with our Climate
Change commitment to be ‘net zero’ by 2040.
 S T R AT E G I C R E P O R T
Laxman Narasimhan: For more recent
joiners, what attracted you to Reckitt
and now you’re here what’s your take
on its culture?
Angela Naef | Chief R&D Officer
The big transformation that was underway
was the real pull for me. I wanted the
chance to bring science and technology
to bear on real-world problems. What’s
struck me most about Reckitt people?
Their sense of purpose. I’m working with
a highly motivated and committed global
team focusing on things that really matter.
Ranjay Radhakrishnan | Chief Human
Resources Officer
Before joining in March, I’d admired the
Reckitt powerhouse from the outside. Now
I get to see the engine. I love the pragmatic,
entrepreneurial and action-oriented spirit here.
Sami Naffakh | Chief Supply Officer
I’m a bit of a special case. I arrived in July
but I also used to work for Reckitt more than
a decade ago. It’s a very different animal
now, a much more mature organisation.
But it’s also managed to keep its amazing
entrepreneurial, can-do spirit. I especially
relate to our purpose, fight and compass, and
our clear commitment to social responsibility
– sustainability, diversity – without any
concession to financial performance.
Jeff Carr | Chief Financial Officer
Our culture is very unique and our people
are fantastic, during these challenging
times I’m very proud how our teams have
reacted with speed and agility to deliver
such a strong performance in 2020.
G OV E R N A N CE F I N A N C I A L S TAT E M E N T S
Harold van den Broek | President Hygiene Jeff Carr | Chief Financial Officer
I think Reckitt’s culture has evolved Our transformation journey has started
significantly just in the last year. We’re so well, the opportunity is now to build
become much more open, diverse and on our strong start and deliver our goal
inclusive, and there’s a learning culture here, of long-term sustainable growth.
which will liberate more energy and ideas.
Laxman Narasimhan: What are your
main challenges and opportunities?
Sami Naffakh | Chief Supply Officer
I want to develop an adaptive supply
network for Reckitt that leverages the
macro changes we’re now seeing in the
world. There’s still a lot to do, but in time I do
expect our supply chain to become much
more customer and consumer-centric, agile,
lean, resilient, sustainable and responsible.
Aditya Sehgal | President Nutrition,
eRB & Greater China
My focus in Nutrition is on strengthening the
core and creating new engines of growth.
Our digitaI business is already doing really
well. I want us to keep on overdelivering
in e-commerce. And we can deepen
and broaden our business in China. Miguel Veiga-Pestana | Head of Corporate
Affairs & Chief Sustainability Officer
I couldn’t agree more. This is a critical year in so
many ways. Time is running out to address the
challenges facing the world today and we have
to play our part. I’m excited that we’ve recently
set out our ten year sustainability ambitions as
an integral part of our strategy – working with
Kris Licht | President Health &
our partners to build a cleaner, healthier world.
Chief Customer Officer
For me, it’s about strengthening the Health
business, I also think there are a lot of
opportunities available to us if we put more
time and resource into customer partnerships.
Ranjay Radhakrishnan | Chief Human
Resources Officer
The Reckitt culture is so important in all this.
I confess I’m itching to connect with people
face-to-face. I do hope that in 2021 I will be
Volker Kuhn | Chief Transformation Officer
able to meet more colleagues, visit factories,
My priorities are to continue to shape
markets so I can see, live and breathe a
the growth in new places and spaces,
bit more of our frontline operations.
deliver on our stepped up productivity
ambitions as well as our commitments to
building stronger capabilities, which are
foundational for sustained outperformance.
Angela Naef | Chief R&D Officer
My focus is on building the capabilities that
Laxman Narasimhan | Chief Executive Officer
will further our delivery in science, technology
I’m with you there Ranjay! Let’s hope the
and innovation to create superior solutions that
world’s in a better place soon and we can
help to address global issues and opportunities
all meet again in person before too long.
that are safe, efficacious and impactful.
Reckitt Annual Report and Accounts 2020 09
 OUR BUSINESS MODEL

WHY WE DO IT
Our purpose Our fight
We exist to protect, heal and Making access to the highest
nurture in the relentless pursuit quality hygiene, wellness
of a cleaner and healthier world. and nourishment a right,
not a privilege.

Today, our brands like Dettol, Lysol, Harpic, Finish, Durex, Mucinex,
Enfamil and Move Free, among others, fight at the frontlines to give our
consumers a better life. Why we exist – our purpose, our soul – is clear.
Each word matters. They speak to our portfolio and the categories in
which we play. Relentless pursuit captures Reckitt’s entrepreneurial
and can-do spirit, all in service of creating a cleaner, healthier world.

HOW WE DO IT
Our key resources
Our people and culture
We employ outstanding people
who work in a unique culture that
harnesses their passion and
allows them to make a real
difference.
Our key brands
We have a portfolio of global
leading brands and other ‘local
hero’ brands that offer faster
growth and higher margins.
Disruptive, ‘rocket’ brands
redefine and extend the spaces
in which we operate.
A virtuous circle of growth
Overarching our core business model, we seek to deliver
Our stakeholders continuous productivity improvements, allowing for further
We develop strong, trusted investment in the business – to our brands, capabilities and growth
relationships with our customers, opportunities. In doing so, Reckitt creates a virtuous circle of growth.
consumers, suppliers and
communities. We access and
develop networks and
partnerships that extend
our impact.
Superior insights Trusted purpose-led
coming from better solutions, supported by
Our infrastructure
data across consumers, science platforms and
Our business is underpinned by
channels and platforms well-invested brands
strong manufacturing sites, R&D
laboratories, centres of
excellence and logistics centres.
The relentless
pursuit of a cleaner,
healthier world

Our knowledge and skills Our financial strength

We have deep consumer
understanding, proven R&D,
quality and innovation capabilities
and an agile organisation, which
gets products to markets fast.
Shareholders’ equity, debt and
retained profit give us the
financial resources to implement
our strategy.
Execution excellence
to drive growth from
Funded by productivity product penetration,
with sustainable, lean market share gains, new
cost structures places and new spaces

10 Reckitt Annual Report and Accounts 2020

 S T R AT E G I C R E P O R T G OV E R N A N CE F I N A N C I A L S TAT E M E N T S

The value we create

Consumers
Consumers receive innovative, safe and
high-quality products, which help them live
cleaner, healthier lives.
Customers
Bricks and mortar and e-commerce
customers gain from selling our leading
brands, growing our categories and driving
customer value in relevant channels.
Investors
Investors benefit from strong
operational and financial performance,
resulting in attractive returns via dividends
and long-term share price appreciation.

For more information For more information For more information

See page 28 See page 32 See page 36

People Communities Environment

Reckitt provides exciting and challenging
careers, with excellent rewards for
outstanding performance.
Our products and social programmes lead
to improved health and hygiene standards.
We recognise the impact we have on the
environment we share with others. We are
working to reduce our impact by reducing
our greenhouse gas emissions, contributing to
reducing global warming and climate change.

For more information For more information For more information

See page 40 See page 48 See page 52

Our leadership behaviours Our compass

In order to deliver on our ambitions around purpose and our business
strategy, we need our culture and our people to be operating at their
peak. In many ways, our culture today is the shadow we cast as leaders.
To evolve that culture and achieve sustainable outperformance,
leadership is a key lever to pull. Our leadership behaviours set out
how we expect each of our leaders to behave and define what
good leadership looks like and how we will evaluate our leaders
going forward. Reckitt leaders OWN, CREATE, DELIVER and CARE.
Our compass sets out the new values and behaviours for
our business. At it’s heart is the goal of always doing the right thing
with clear principles around putting consumers and people first,
seeking out new opportunities, striving for excellence and building
a culture of shared success. Our compass will guide us to sustainable
growth in the future.

Put consumers
Own Care and people first
• L
 ive our purpose, fight • Actively listen, learn
and compass and include
• Know our business cold • Speak direct with respect
• Make decisions • Act to unleash potential

Do the
Build shared Seek out new
right thing.
success opportunities
Create Deliver Always.
• Spot opportunities • Focus on what matters
• Innovate, iterate and scale • Move boldly and at pace
• Relentlessly build better • Join forces to win bigger

Strive for
excellence

Reckitt Annual Report and Accounts 2020 11


OUR PURPOSE
DRIVES OUR
PERFORMANCE
Our purpose, to protect,
heal and nurture in the
relentless pursuit of a
cleaner healthier world
drives our performance.
Our purpose focuses
our teams and creates
opportunities for business
growth that will deliver
long-term shareholder
value. We create value for
our business and for society
through our growth which
increases our social and
environmental impact.
Our strategy meets the needs and the
concerns of our stakeholders. Our strategy
delivers our purpose and our fight to make
access to the highest quality hygiene, wellness
and nourishment a right, not a privilege.
Our brands create opportunities in
people’s lives, through better health,
hygiene and nutrition. They meet growing
consumer demands, all the more so during
the pandemic. In doing so, they have an
authentic social impact, fighting at the front
lines to give our consumers a better life. We
don’t just sell products, we design solutions
that meet fundamental human needs.
12
PU RPOSE- LED G ROW TH
Connecting with our stakeholders
Our stakeholder relationships extend our
ability to deliver on our purpose. Listening
to and working with consumers, customers,
partners and colleagues throughout our
business brings greater opportunities. During
2020, as we launched our new strategy and
developed our environmental and social
ambitions, this was more important than ever.
With Ipsos Mori, we engaged with a
representative sample of our consumers
in each of our key markets in the UK, US,
Mexico, India and China. The research helped
us better understand what our consumers
knew of our corporate purpose and how
we are bringing it to life through our brands.
Our purpose-led brands are well known and
trusted by consumers. Our wider corporate
work, for example our partnerships and work
throughout our value chain, is less understood.
Importantly, the research demonstrated the
need to show consumers the connections
between our consumer brands and our wider
corporate activity. This can build trust more
broadly, and powerfully reinforce that the
whole is greater than the sum of the parts. This
is one of the goals of our business strategy,
brought to life through our Reckitt brand.
Those same consumers also told us what
was important to them. 71% said climate
change was as significant a threat as the
pandemic, and 65 % told us they would
support a green recovery. This reinforced the
importance of our commitment to combat
climate change, and our ambition for carbon
neutrality by 2040. We are collaborating on
this with Amazon and their Climate Pledge.
Reckitt Annual Report and Accounts 2020
In UN Climate Week, we jointly hosted
discussions on climate change to encourage
scaled-up activity. With other peer companies,
we have also worked in the Business
Avengers group to support delivery of other
Sustainable Development Goals (SDGs). Reckitt
is leading activity on SDG 3, Good Health
and Wellbeing, as it is central to our Health,
Hygiene and Nutrition brands. We know the
importance of the SDGs to our stakeholders
and, more importantly, to communities
where we work around the world.
Understanding our contribution to society
is important in our role as a global corporate
citizen. It helps frame our approach to
create the greatest impact. Our 2020 socio-
economic report described the impacts
of our business in the US. We will carry out
similar studies elsewhere to strengthen our
activity and engagement with stakeholders.
C A S E S T U DY
OUR WWF
PARTNERSHIP
Reckitt is partnering with WWF over three
years to create a movement to fight for
nature. WWF and Reckitt’s Hygiene business
will together:
• Preserve and restore 2,100 km of
freshwater across two major river basins
in the Amazon and Ganges (two of the
world’s most important freshwater
ecosystems)
• Innovate for a more sustainable world,
including improving understanding of
the impact of household products on
aquatic environments, and explore how
to improve the innovation pipeline; and
• Inspire millions to fight for nature
through impactful brand partnerships
with our consumers and engaging our
employees
As part of our partnership, Air Wick, is working
with WWF to bring its purpose to life and
connect people to nature. The Air Wick team
is activating this purpose in various markets,
including Australia, the UK and US, to raise
awareness of the importance of nature and
how we can all do more to protect and
restore it. Reckitt will support WWF projects
to restore wildflower habitats to reverse the
decline of biodiversity. For example, in the US,
Air Wick is helping to reseed 1 billion sq ft of
native grasslands and wildflower habitat in
the Northern Great Plains.
 S T R AT E G I C R E P O R T
Putting consumers first
Consumers buy brands they
trust. They rightly expect safe,
effective and sustainable
products, delivered at a fair price.
This is always our focus, but we
are also meeting their growing
expectation that products are
responsibly sourced and won’t
damage the environment. And
that our social and environmental
impacts tackle global issues
for a sustainable future.
Read more page 28
Extending our impact
with like-minded
partners
We join forces to build shared
success with suppliers, scientists,
civil society and more, that
deliver practical and sustainable
solutions to create a cleaner,
healthier world. Our partners
share our purpose and values.
Through them, we build lasting
solutions with real social impact.
Read more page 44
G OV E R N A N CE
Fostering stronger
customer relationships
Our customers’ expertise brings
consumer insights to strengthen
our innovation pipeline. We
work with our customers to
build and meet joint goals,
design and develop even safer
and more effective products
and to enable greater social
and environmental impact.
Collaboration with our customers
enables joint activity that
supports both our own purpose
and our collective ambitions.
Read more page 32
Investing in communities
We fight to make access to
the highest quality hygiene,
health and nutrition a right not a
privilege. Improving that access,
in communities with unmet
needs, creates social impact
and brings our brands to new
consumers. Through our products,
consumer education and skills,
we empower people to make
small changes in their lives for
a cleaner, healthier world.
Read more page 48
Reckitt Annual Report and Accounts 2020
F I N A N C I A L S TAT E M E N T S
Engaging investors
Through engaging with our
investors we have support
for our strategic initiatives
and in return they share our
success. Open, effective
communication, combined with
performance and clear plans
for the future, builds trust and
confidence in our company.
Read more page 36
Building a
sustainable future
The world’s environmental
challenges demand action on
multiple fronts. Our ambition is not
just to combat these challenges,
but to help build forward better
where we can, and especially
where we can have most impact.
Read more page 52
Inspiring and supporting
our people
Our highly skilled people enable
our success. We want to attract,
develop and retain the very best.
Engaged, inclusive teams spur
growth and performance. We
want our teams to feel good
about what they do and our
contribution to the world as a
whole. Our purposeful culture
strengthens engagement and
brings better brand offerings
for consumers and more value
for shareholders and investors.
Read more page 40
13
 M A P P I N G W H AT M AT T E R S T O O U R S TA K E H O L D E R S
MEETING THE NEEDS
OF SOCIETY AND OUR
STAKEHOLDERS
Our business is responsive
to the change that is
happening around us. We’re
working together to keep
pace and meet people’s
changing needs. As part of
our business transformation,
our strategy focuses on
our purpose in the world,
clearly articulating the
reason we exist and the
change we want to see
that drives our growth.
Reckitt works with a wide variety of
stakeholders: our consumers and customers;
investors and shareholders; our suppliers
and partners; governments in support
of a wider public health agenda; and, of
course our 43,500+ strong team whose
engagement drives our business.
The trends we describe in our business
strategy create challenges and opportunities
for ourselves and all of our stakeholders.
These trends connect us to the needs and
expectations of our stakeholders. Our approach
creates opportunities for growth, stronger
relationships with stakeholders and, through our
business, a positive social and environmental
impact. While the pandemic has touched
everybody around the world, the trends have
continued and even gathered momentum.
The need for self-care within the wider public
health arena has perhaps never been more
visible, especially within an ageing population.
Greater awareness of climate change leads
14
to an emphasis on building forward better
and mandates our contribution to support
the Paris Agreement. The expansion of virtual
The megatrends
communication has made digital technology
even more essential and valued by everybody.
The pandemic has also reinforced the Hygiene
necessity for agility within our business and Urbanisation and
preparedness for similar future regional
global warming
or global events. Organising our supply
networks to address such potential events
is a natural evolution of the agility we
demonstrated in maintaining and actually
growing production during 2020. In doing so
Health
we helped people combat the pandemic. We
built powerful relationships with our suppliers Growing demand
and, importantly, with our customers with for self care
progressively stronger service delivery.
Addressing these trends is central to our
purpose-led growth. Our ambitions for 2030
and beyond, stemming from our materiality
assessments, considered these trends while
thinking how we would build forward better. Health
Our approach helps deliver the UN’s
Sustainable Development Goals, which
Sexual health crisis
are central to our ambitions. By aligning
with the SDGs, we are addressing
challenges faced by society as a whole and
creating opportunities for ourselves. While
-we are tackling many of the 17 Goals, we will
Nutrition
continue our emphasis on five where we can
have most impact through our business – Growing and ageing
SDGs 2, 3, 5, 6 and 13. population
Integrating social and environmental
impact within our business agenda draws upon
James Reckitt’s legacy. New innovations bring
greater efficacy for consumers and greater
impacts for society. We are developing our Digital and e-commerce
brands, our business, our supply networks
and channels to consumers to maximise our Technology
positive impact on society within the growth proliferation
of our business. This reflects the heritage
that has guided Reckitt for over 200 years.
Reckitt Annual Report and Accounts 2020
 S T R AT E G I C R E P O R T
As Reckitt, we’re now more unified than ever.
We’re working together, with all of us pulling in
the same direction, and in support of all our
stakeholders. This unity makes us stronger
because it links to our total offer. We are
connecting everything we do with everything
that people value.
Consulting with our stakeholders
We consult stakeholders in many ways
across our business. Top-level meetings
with our customers; multi-stakeholder
forums; academic partnerships, especially
for science and medicine; our work with
the Reckitt Global Hygiene Institute; and
our new Board listening sessions with key
stakeholders – all serve to bring the voice of
our stakeholders into our business agenda.
Our work is informed by feedback from
groups relevant to our business operations,
including consumers, customers, suppliers,
investors, governments, non‑governmental
organisations (NGOs), industry peers,
educational institutions, communities and our
employees. They tell us what matters most
and those insights help us better meet their
needs, and improve our approach for the
future. In doing so they add to the materiality
process described in our Focusing on what
matters insight. Whilst we did not carry out
a new study in 2020, assessment for our
sustainability agenda provided an update.
Our 2020 internal engagement programme
amplified the voice of our 43,500+ strong
team. It helped strengthen our culture and
supported our diversity and inclusion ambitions
against a backdrop of global cultural trends
and campaigns. The programme, described
in our People section, brought our people
together in an unprecedented way and
increased employee engagement overall.
At Board level, we have brought the voice
of our various stakeholders to life in assessing
challenges we face in our value chain. We
began a new series of Board listening sessions
with a panel on climate change and water
stress. Members of our CRSEC Committee
heard from one of our key customers, an
international NGO partner, the UK Government
on the global climate change conference
in 2021, an Indian state Government where
water stress is a critical issue, and the investor
community. The session provided detailed
understanding from each stakeholder’s
perspective and has helped to frame our
ambition on water in our new sustainability
agenda. A similar event included members of
our Executive who heard from our human rights
partner, the Danish Institute for Human Rights,
about their human rights impact assessment
of our Thai value chain. The subsequent
action plan aims to strengthen human rights
for people we work with in Thailand.
G OV E R N A N CE
The Sustainable
Development Goals
In 2015, UN Member States adopted the 17
Sustainable Development Goals as part of the
2030 Agenda for Sustainable Development. In
2019 the UN Secretary-General called for a
decade of action by all stakeholders, asking
civil society, academia, the media and the
private sector to deliver the 2030 Goals. At
Reckitt, we recognise the impact we have for
society and on many of these goals. As with
the interdependence between the Global
Goals, the connection between the health of
people and of the planet is central to our
sustainability agenda. We recognise that as
society thrives, so do we. We want to do all we
can to help meet this challenge.
There are five SDGs where our impact can
be greatest. These embody the work of our
brands and our business as a whole, through
our value chains and in our partnerships
that support the poorest communities –
where hunger, disease and poor sanitation
are most prevalent, and where the worst
effects of climate change are felt first.
Aligning with the United Nations Sustainable
Development Goals (SDGs)
SDG 2: Zero hunger
In infant nutrition we focus on the
first 1,000 days of life. Our products
keep mothers healthy and nourish
their babies. In line with World Health
Organization (WHO) guidelines, we
promote exclusive breastfeeding in
the first six months. Protecting
people against malnutrition and
stunting is a key theme for our social
impact investment programme.
Reckitt Annual Report and Accounts 2020
F I N A N C I A L S TAT E M E N T S
SDG 3: Good health and wellbeing
This goal is closely aligned with our
purpose and as the Business Avenger
for SDG 3, we are championing
swifter progress in the private
sector. Many of our brands play a role
in promoting health and wellbeing.
They include Durex, Dettol, Gaviscon
and Mucinex, as well as Lysol and
our Mortein insecticide products.
The pandemic has ensured this has
been a focus throughout 2020.
SDG 5: Gender equality
Promoting gender equality is in our
employment policies and in our
social impact programmes. Our
employment policies drive gender
equality in our teams. We have
mentoring schemes for female
employees, gender-balanced
shortlists and proportionality targets
at senior management level. We
also now report internationally
on our gender pay gap. We have
set up social impact projects
to encourage girls to stay in
school in South Africa and equip
women in rural communities
with independent income.
SDG 6: Clean water and sanitation
Our Harpic, Dettol and Lysol brands
are closely associated with
programmes emphasising the
importance of good sanitation and
hygiene. In partnership with Water.
org and WaterAid our Mission Paani
and Banega Swasth campaigns
improve access to water and
sanitation, building community
awareness of health and hygiene.
Publicity campaigns emphasise
conserving water and ensuring
sustainable sources for future
generations, and build water
harvesting in selected villages.
SDG13: Climate action
We are accelerating delivery of the
Paris Climate Change Agreement
to keep global warming to below
1.5oC. This is a major milestone in
our ambition for carbon neutrality
by 2040 – a decade ahead of
the world’s goal of 2050. We will
reduce carbon emissions from
our sites by 65% and power our
operations with 100% renewable
electricity by 2030, while also
reducing our products’ footprint.
15
 O U R M A R K E T S A N D M E G AT R E N D S

Reckitt operates in attractive, growing

market segments, underpinned by
clear megatrends:
Urbanisation and global warming, and their impact on the
spread of infection, re-enforcing the necessity of improved
hygiene; growing demand for self-care, given pressures on
governmental spending globally; growing importance of
sexual health and wellbeing; a growing and ageing population;
and ever-changing technology, which is transforming
consumer knowledge and purchasing habits. Most of these
trends have been accelerated or accentuated by COVID-19.

HYGIENE HEALTH NUTRITION

Global market Global market Global market

80bn n
£ 1
160bn
£ 1
130bn
£ 1

4–5%% 4–6%% 3–5%%

Surface Laundry care ex. detergents OTC Sexual Wellbeing Infant formula Vitamins, Minerals & Supplements
Dish Other Germ protection Other

Top Reckitt markets Top Reckitt markets Top Reckitt markets

Relevant megatrends Relevant megatrends Relevant megatrends

1 5 1 2 3 5 4 5

1. Source: Euromonitor and company estimates. Nutrition excludes Solid baby food

16 Reckitt Annual Report and Accounts 2020

 S T R AT E G I C R E P O R T G OV E R N A N CE F I N A N C I A L S TAT E M E N T S

COVID-19 impact
Megatrends on megatrends

2.5bn
The role we play: with our category- Penetration to existing plus
Global warming
1
+
leading disinfection brands, such as new households
and urbanisation Dettol, Lysol, Sagrotan and Napisan, we
help break the chain of infection. We New market expansion
The issue: The transmission of infection is likely to be a people living in urban areas
over the next 30 years work hard to better understand and
growing global issue over the coming decades, as

10
respond to evolving consumer needs, New use occasions
growing populations and movements of people create
such as the growing demand for
the conditions necessary for the spread of disease. It is
protection against germs outside
estimated that an additional 2.5bn people will live in
of the home.
cities over the next 30 years1 – this increase is driven
primarily by Africa and Asia, with 10 new ‘megacities’ new ‘megacities’
expected by 20302. Similarly, climate change is to be formed by 2030
increasingly being linked to growth in infection and
disease, with deforestation thought to be the cause
of 1/3 of new and emerging outbreaks such as Ebola
or Zika3.

48%
The role we play: with our over-the- More self-care due to further
2 The role of self-care counter brands such as Mucinex, Nurofen pressure on health systems
and Strepsils, we provide people with
the products and information they need Increase in telemedicine
The issue: In both developed and emerging markets, in UK to consult
pharmacists more to treat many everyday symptoms such
ageing populations and stretched public finances are One-off decreased cold
often, although 31% as cold and flu, themselves, without
placing ever growing pressures on health systems. This and flu season
would not have done so recourse to a medical professional. By
is in turn leading patients to seek – and governments to
pre-COVID-19 4 saving a trip to the doctors, we are
encourage – self-care. This is made easier by technology
helping to reduce demand on strained
which provides increasingly sophisticated personalised
Half of all UK hospital public healthcare.
recommendations.
trusts⁵ are in

FINANCIAL
DEFICIT
1m
3 Sexual health crisis
The issue: Sexual health and wellbeing is a growing people infected each
day with a sexually
societal issue and widely considered an endemic, with
transmitted infection 6
1m infections globally every day. In many areas of the
The role we play: as the world’s leading Increased sexual health crises
producer of condoms and with 90 years as a result of untreated
of brand heritage, Durex has a crucial role symptoms
to play in improving education around
Social distancing reducing
risks of sexually transmitted infections,
frequency of condom use
and encouraging safe sex. We focus our

1.7mm
world awareness and understanding of these issues
are poor.
newly infected with
HIV infections globally
according to latest World
AIDS day 2020 factsheet 7
efforts to shape long-term attitude and
behaviours on the point of market entry
programs help young people make
informed and confident choices, working
with partners such as National AIDS
Control Organization (India), Solidarte
(France), Dance 4Life (Netherlands),
UNFPA (Mexico), and the Ministry of
Health in Russia.

1
The role we play: our VMS brands such Continued growth in
4 Ageing population
C.£ bn
as Move Free, MegaRed and Neuriva speciality and immunity
address important needs in nutrition.
Leveraging the science capabilities Birth-rate challenges in the
The issue: With people living longer, there is growing size of the elderly nutrition near-term
market in China, which is within our Infant Nutrition business, our
demand for health and wellbeing products that allow
growing at c.17% per product innovation naturally addresses
people to live their lives to the full – with a healthy body
annum 8 the opportunity presented in the adult
and mind.

2bn
and senior markets.

people will be aged

over 60 by 2050 9

710m
The role we play: our investment in eRB Fundamental change in
5 Technology proliferation means that consumers can discover and consumer engagement
purchase our products how and when
they want. Our direct to consumer Step-change in e-commerce
The issue: Technology is transforming consumer people make up the transactions
Chinese e-commerce business now allows for speedy delivery
behaviour and purchasing decisions, affecting what
market, now bigger than of health products such as analgesics
people buy and how they buy it. This has implications for Digital, personalised health
the US and Europe and condoms. We are also increasingly
the way we develop and market our products, the value
combined 10 able to deliver personalised nutrition.
we can offer consumers, as well as how we manage our

49%
supply chain.

+
growth in US online retail
sales in Q4 2020 11

1. United Nations 5. The Kings Fund 9. World Health Organisation

2. United Nations 6. World Health Organisation 10. www.statista.com
3. Ecohealth Alliance 7. UNAIDS Factsheet, December 2020 11. Mastercard survey between October – December 2020
4. Ipsos Consumer Healthcare Survey, July 2020 8. Company estimates

Reckitt Annual Report and Accounts 2020 17

 D E L I V E R I N G O U R S T R AT E G Y

REJUVENATING
SUSTAINABLE
GROWTH
In February 2020, we shared our strategy for rejuvenating sustainable
growth, and our medium-term financial targets. This set out how we would:

1 4
Drive growth, rebuild a strong earnings model and Deliver progressive improvements to our top-line growth
outperform with mid-single digit organic top-line, mid through better product penetration, market share gains,
20’s margins and 7-9% EPS growth and expansion into new places and new spaces

2 5
Enable improved growth by investing in key capabilities to Manage capital allocation to support a strong balance
strengthen product innovation and enhance customer sheet while actively migrating our portfolio to higher growth
service, with sustainability at the heart of everything we do opportunities

3
Fund investment through delivery of an enhanced
productivity programme and short-term reduction in
operating margin

The three phases of rejuvenation

The journey will be undertaken in three phases that will initially establish
consistent performance, build revenue momentum and finally achieve
sustained outperformance.

20191 1 First phase

Stabilise and perform 2 Second phase
Perform and build 3 Third phase
Outperformance

NR growth +0.8% NR Mid-single digits

EPS growth +2.8% EPS +7-9%

• Sustain Hygiene growth • Step up Hygiene growth

• Reignite Health volume and growth • Sustain and step up Health growth
Performance drivers
• Reignite Nutrition developing market • Broaden and grow Nutrition
growth • Improve Health and Nutrition margins

• eRB
• Research and development
• Product quality
Example investment areas
• Customer service and marketing
excellence
• Supply chain performance
• Sustainability
• eRB
• Maintain foundational capabilities
• Availability in developing markets
• Channel-specific sales resources
• Science and technology platform
partnerships

1. 2019 Like-for-Like NR and Adjusted diluted EPS presented

18 Reckitt Annual Report and Accounts 2020

 S T R AT E G I C R E P O R T G OV E R N A N CE F I N A N C I A L S TAT E M E N T S

Good strategic progress in 2020 A new organisation structure

During 2020 – in the first phase of our plan – we have executed well,
against a highly dynamic market backdrop, achieving financial targets
ahead of expectations. As outlined, we have taken the opportunity of
stronger than expected revenue growth to reinvest in incremental
growth opportunities. As a result, we have taken advantage of some
positive market developments across the breadth of the portfolio. For
example, COVID-19 has presented significant opportunities for our
disinfectant brands, resulting in strong growth; over this period, we have
worked to take Dettol and Lysol into 70 new markets, and new category
adjacencies over 2020 and 2021, including to service business customers,
in particular the providers of accommodation, travel services, public
spaces and events, workspaces and shared facilities.
Finally, we have throughout 2020 established a new organisational
structure, moving to three category-focused business units of Hygiene,
Health and Nutrition, with our China and e-commerce teams integrated
across each of these (see box).
Strong first year from our enhanced productivity plan
Our investments, which total over £2bn over the period 2020-22, are
funded primarily by our productivity programme. In our first year we
delivered productivity savings of £407m, significantly ahead of our plan.
As a result, and with new opportunities identified, we have increased our
plan by £300m, to £1.6bn over the three years. This will help us mitigate
a number of new input cost pressures.

Strong early achievements investing in the core enablers of growth

OUR ORGANISATIONAL
Our strategy is centred around rebuilding core capabilities that will
support sustainable growth – such as eRB, R&D, product quality,
customer service and marketing excellence, supply chain performance

STRUCTURE
and sustainability. While there is still work to be done, we have already
made good progress in reinvigorating a number of these functions in
a number of areas. Firstly, on customer service, we have established
centres of excellence for sales, marketing, e-commerce and medical
sales and are building out our global customer relationship teams.
We are already harvesting the benefits having seen a significant
improvement in our third-party relationships and ranking on the Hygiene Health
external Advantage survey of retailers where we have advanced Nutrition
9 places, moving from the lowest tier to inside the top 10 of FMCG
peers globally. We expect to make further improvements over time:
Secondly, on supply chain, we responded strongly to the exceptional Greater China
demands of 2020 with investment, SKU-rationalisation and the use of
co-packers. We have also commenced reshaping the network in order
to increase long-term capacity and resilience through responding to
channel shifts with greater flexibility and reducing overall lead times
and leveraging data, AI and machine learning to target substantial further
improvements.
Thirdly, we are improving our Digital and e-commerce strategy – eRB
Be Big, Be Fast and Be Bold – by investing in and leveraging established
capabilities to accelerate developments in D2C, marketplaces and
through Bricks and Clicks channels where customer behaviour changes, Global Functions
as more consumers migrate online, have driven the strongest growth.
We have also invested to further build B2B e-commerce to leapfrog
Getting the right balance between scale, focus and accountability
go-to-market capabilities in developing and emerging markets.
is key. As such, during 2020 we moved to three category-focused
R&D, Quality and Product Innovation is the fourth area of focus
business units with full P&L accountability: Hygiene, Health and
and we have already increased the run-rate of R&D investment by 35%
Nutrition, with the latter comprised of the IFCN and VMS businesses
compared to 2019. This investment will help drive development of new
which previously sat in Health. Within each of these three Global
science platforms. The strength and depth of the innovation pipeline is
Business Units we are developing capability centres of excellence
already leading to new products such as the ultra-thin condom which
that can be leveraged across the company.
was launched into the Chinese market in 2020 and the development
of our first adult nutrition products within the first year of programme.
Due to its strategic importance for the business, we elevated China
We have also worked to widen consumer health brands across broader
to an integrated unit that will work across the three business units.
demand spaces and significantly enhanced consumer-perceived
Digital, e-commerce and analytics are at a major turning point for the
product quality and quality processes.
consumer and we can further speed rapid growth by building
We are driving the sustainability agenda and made a £40m
leapfrog digital capabilities. The digital platform we have in China is
investment in the Fight for Access Fund to support disadvantaged
one that other rocket brands can leverage. For this reason, the China
groups battling COVID-19. We also launched the Reckitt Global Hygiene
business unit will also house our global e-commerce capability.
Institute to advance evidence of behaviour change and are investing
across the portfolio to drive the acceleration of new sourcing, packaging
and product innovations as a clear differentiator for purpose-led
brand growth. We are committed to climate change and thus we
are accelerating work to deliver on the Paris agreement so that
we achieve carbon neutrality by 2040.

Reckitt Annual Report and Accounts 2020 19

 D E L I V E R I N G O U R S T R AT E G Y C O N T I N U E D
Clear decisions around capital allocation
Building a stronger balance sheet is a clear priority for us. During
2020, we have reduced net debt by over £1.7bn through improved
cash generation and maintaining a strong fiscal discipline around
funding our investment programme through enhanced productivity
and outperformance. As a result, our net debt leverage metric has
improved with Net Debt / Adjusted EBITDA falling from 2.9x at the end
of 2019 to 2.4x. Consistent with the policy outlined in February 2020 we
have confirmed we will hold our full year dividend unchanged at 174.6p.
This is so we can rebuild dividend cover to two times and confidently
grow the dividend sustainably in the future in line with a stronger, more
consistent EPS growth.
PRODUCTIVITY IN ACTION
• Continued Reckitt manufacturing efficiency drive and
continuous improvement programme across all sites
• Developed Reckitt production system focusing on
performance management, leadership, consistent standards,
continuous improvement routines on site and leveraging
analytics / technology to highlight / solve problems
• Successfully deployed our new production system in pilot sites
– Nijmegen (NL – Nutrition) and Nottingham (UK – Health)
We are also taking decisive action to manage our portfolio. With markets
for infant formula in Greater China continually evolving, we have been
undertaking a strategic review of the infant formula business in China. No
decision has yet been taken to the overall outcome and we will provide
further updates as appropriate. At the same time, we have agreed the
sale of Scholl and the acquisition of Biofreeze. Together, these deals are
expected to be earnings neutral initially, but to position further the
portfolio towards higher growth markets.
Delivering sustainable change to culture and purpose
Our strategy is founded upon a clear sense of purpose. We exist to
protect, heal and nurture in our relentless pursuit of a cleaner, healthier
world. We do all we can to ensure that access to high-quality hygiene,
health and nutrition becomes a right not a privilege. Our purpose and
fight are set out in more detail in our ‘business model’ overview in
this report.
This purpose-led agenda is underpinned by the core set of values
guiding our behaviour. They are set out in our compass (See page 13).
This places integrity at the heart, with the goal of always doing the right
thing. Our compass describes the values needed to promote a culture
that puts consumers and people first, continually seeks out new
opportunities, strives for excellence and builds shared success. It
celebrates what made Reckitt successful in the past and aligns us
with what is needed for sustainable growth in the future.
20 Reckitt Annual Report and Accounts 2020
Fundamental to the transformation of Reckitt is the work underway on
sustainability. During the year, we have stepped up our investments in a
number of ways.
• Our purpose, fight and compass has been adopted across the
business; strengthening our environmental and societal commitments
and driving positive changes to culture
• Our Fight for Access Fund was launched to support our community
engagement; initially focused on helping disadvantaged groups
battling COVID-19 related issues; the equivalent of 1% of adjusted
operating profit will be invested annually
• Reckitt Global Hygiene Institute launched to help inform public health
recommendations and promote behaviours that improve global
hygiene
• Accelerated the development of new sustainable sourcing,
packaging and product innovations as a clear differentiator for
purpose-led brand growth
• Launched our Climate Change commitments, accelerating work to
deliver Paris Climate Agreement by 2030 and achieve carbon
neutrality by 2040
ESTABLISHING CENTRES
OF EXCELLENCE
Throughout 2020 we have invested to create four centres
of excellence: central functions whose role is to support the
GBUs in specific areas of speciality, sharing best practice, and
committing dedicated resource.
1 Marketing excellence – seeking to accelerate the growth of
Reckitt’s brands through the development of a best in class
Marketing function and to drive a step-change in our brand
building capability. Organised around the five pillars of:
Purpose-led brand building; Brand experience and Design;
Insights and Analytics; Data-driven marketing and media;
and Marketing Capability and Operations.
2 Sales outperformance – re-building this historic strength
of Reckitt, turning our sales capability in to a competitive
differentiator. Led by newly-appointed Chief Customer
Officers for each of US and International, this function
partners with customers to understand their business and
develop mutual opportunities for growth.
3
eRB – the home of Reckitt’s e-commerce, CRM and digital
execution initiatives, across three pillars: ‘Be Big’ (scale
success, through platforms); ‘Be Fast’ (rapid experiments
and D2C services); and ‘Be Bold and Open’ (minority
investments in start-ups).
4 Medical sales – seeking to transform the way we engage
with healthcare professionals, through a consistent, efficient
and commercially elevated approach to the medical channel.
The newly-created roles which sit within these functions
have been filled with both internal and external talent.
Whilst these functions will continue to build throughout 2021,
there is evidence of early success, with improving customer
relationships, and improved marketing and sales efficiency.
 S T R AT E G I C R E P O R T G OV E R N A N CE F I N A N C I A L S TAT E M E N T S

Our four growth drivers

We see our strategy driving growth in four complimentary ways:
increasing product penetration, driving market share gains, entering
into new places and opening up new spaces. Increased penetration is
about capturing new consumers entering the category, and pushing our
products to gain a greater role in a category (e.g. germ protection in
surface cleaning, auto dishwashing within dishwashing more broadly).
We gain market share through winning with end-consumers and
by servicing existing consumers faster, better, and more efficiently
with better and more relevant products than our competitors.
New places is white space growth and taking our brands and products
into new territories and countries through our existing network, via
e-commerce and using our cross-border organisation.
New spaces and adjacencies capture new market opportunities
using our brand strength to penetrate other parts of the demand space
a brand plays in.
In the first year of our transformation plan, we have made
significant progress against our four growth drivers.

Increased penetration Market share gains

• Our category-leading disinfectant brands have seen exceptionally
strong levels of penetration increase, with Lysol for example now
present in over half of all US homes and used by over 100 million
households globally; In Canada, Lysol penetration is up over 1200bps
over the past year
• In India alone, Harpic is now used in over 100m homes, up by nearly
30 million compared to 2019, as a result of purpose-led marketing
campaigns centred around behaviour change
• 70% of our core Hygiene category market units, and 85% in Health,
held or gained market share in the year
• Finish has taken significant share in the US, up over 70bps, in a strong
but competitive market, in part due to its purpose-led campaigns
around the critical issue of water scarcity
• Gaviscon grew market share by over 100bps globally, including
over 100bps in the UK, as a result of product innovation and
strong execution
• Step-changed Mortein’s performance in key markets through building
brand trust, product innovation and improved marketing
• Durex gains of c.130bps in China following the launch of the PU,
ultra-thin condom
• Sequential improvements in market share performance for Mucinex,
delivering unchanged market share overall, through better execution
in weak US market conditions for medicated products

New places New spaces

• Increased demand for Dettol and Lysol provided the opportunity
for expansion into a total of 41 markets during the year
• Global Business Solutions – our professional business – growing
strongly and expected to contribute c.100bps to Reckitt growth in
2021 to represent c.8% of total disinfectant revenue
• Lysol’s entry into Brazil in May for example, launching Sprays, Wipes and
Liquids, has already achieved prompted brand awareness of over 40%
• In Hygiene, we entered into the aromatherapy category in the US,
with Air Wick essential mist – an innovation which was recognised
amongst the Top 25 Breakthrough Innovations in this year’s US BASES
awards – four of which were Reckitt products
• In Health, product innovation took Mucinex (All-in-One and Nightshift)
and Strepsils (Herbals) into new product adjacencies
• Adult Nutrition launched in China

Drivers of growth
Enablers of growth
Drivers of growth
Investment Cultural

Customer service
Penetration Hygiene
Organisational focus
around purpose, 4-5% growth pa1
eRB
fight and compass
Share
Brand equity
Health
Product innovation
4-6% growth pa1
New places
Turning sustainability
Global Business Solutions from compliance
to a growth driver
Nutrition
New spaces Stronger footprint
3-5% growth pa1

1. Medium term growth rates

Reckitt Annual Report and Accounts 2020 21

 D E L I V E R I N G O U R S T R AT E G Y C O N T I N U E D
C A S E S T U DY
Increased penetration
HARPIC
PENETRATION
IN INDIA
In India, we have seen a continued
increase in the penetration of Harpic
following purpose-led behaviour
change campaigns. Our campaigns
have sought to encourage consumer
use of a specialized toilet cleaner
like Harpic rather than the non-
specialized detergents and water,
frequently used historically.
The central idea of the brand is that it
“Removes 10/10 stains and disinfects
your toilet” – a claim backed by a
consumer tested product formula. The
campaign was executed successfully,
leveraging celebrity ambassadors,
with heavy investment in Digital,
TV, print, out-of-home and rural
outreach, reflecting the diversity of
the consumer base in the country.
The brand is now used in over 100m
homes, up by nearly 30m compared
to 2019. This increase has been seen
nationwide, with penetration in both
urban and rural areas up significantly.
In doing so, and through a partnership
with Network18, the largest TV news
network in India, Harpic has built more
than simply a brand that consumers
trust. Rather it has become the
champion of sanitation in India. In Q1
2020, Harpic was rated the 3rd most
trusted homecare brand in India.
22
C A S E S T U DY
Market share gains
INNOVATION-LED
PERFORMANCE
IN THE US
In the US, we have seen good market
share performances in Nutrition.
The immunity segment within VMS
has seen exceptionally strong growth
given consumer concern around
COVID-19, but in addition, Airborne
has grown share as a result of strong
innovation and rapid ramp up of supply,
increasing threefold during the year.
In Infant Formula, Enfa defended an
already strong position in the WENR
(‘WIC1 Exempt, Non-Rebated’) market
growing over 5%. This was led in large
part by strong insight-led innovation
with NeuroPro – an Omega3-DHA-led
product. The innovation was allied
to strong consumer and healthcare
professional marketing execution.
1. WIC – Women, Infants and Children
programme
Reckitt Annual Report and Accounts 2020
C A S E S T U DY
New places
EXPANDING
THE DUREX
FOOTPRINT
In 2020, Durex continued to
democratise access, driving continuous
improvement in availability even
in the most fragmented consumer
markets. In Russia, in partnership with
Fractal Analytics – a leader in the use
of Artificial Intelligence in decision
making – Durex used leading edge
machine learning to help us decide
where our products should be sold,
and in what ranges. Backed by vast
quantities of data on consumer
demographics, geographical nuances
and commercial sales, these insights
resulted in significant market share
uplift as, for example, we adjusted pack
sizes in certain 24/7 pharmacies located
in close proximity to a nightclub.
At the same time, we know that
consumers will often want to make
purchases whilst at home, when
time can be of the essence. Thanks
to our partnership with Glovo and
Deliveroo, we are shaving further time
off delivery, with many deliveries now
taking place in under 900 seconds.
 S T R AT E G I C R E P O R T G OV E R N A N CE F I N A N C I A L S TAT E M E N T S

C A S E S T U DY

New spaces

ENTERING THE
Global Business Solutions was established
during 2020 in response to the growing need

PROFESSIONAL
for germ protection as consumers want to
feel safe outside the home, as well as inside.
New opportunities have therefore emerged

SPACE
as workspaces, accommodation and other
public spaces, such as hospitality venues and
public transport, need to not only be clean,
but be visibly clean. Our category leading
disinfectant brands will enable customer
facing businesses and venues to give their
customers the appropriate reassurance.

100+
Reckitt offers ‘front-of-house’ solutions,
where our brands are visible to our partners’
customers. For many of our partners, we work
closely to develop and integrate ourselves
into their existing cleaning protocols, thereby
helping them to solve long-term challenges
related to hygiene and cleaning on their
premises and understanding the key risk people are part of our multi-functional
areas and complexities. Partnerships signed

C.100bps
team with global presence
so far have been with globally-renowned
organisations such as: AirBnB, British
Our brands Airways, Delta Airlines, Hilton and Uber.

The 100+ strong GBS team has a global

presence and is multi-functional. GBS is
growing strongly and we expect the
momentum to continue and contribute Global Business Solutions expected
c.100bps to Group net revenue growth in 2021. contribution to 2021 Group revenue growth

Reckitt Annual Report and Accounts 2020 23

 K E Y P E R F O R M A N C E I N D I C AT O R S
PURPOSE-LED
PERFORMANCE
Our strategy to rejuvenate
growth draws on our 200
year heritage of social
impact. Our brands provide
people with access to the
highest quality hygiene,
wellness and nourishment
a right and not a privilege.
We create impact through our brands and how
we work, with an emphasis on purpose-led
brands, a healthier planet and a fairer society.
Our ambitions for 2030 support long-term,
purpose-led growth. They drive us to reach
more people with our brands and create
measurable impacts in their lives that also
help tackle global social and environmental
challenges and deliver the UN’s Sustainable
Development Goals.
As our approach towards sustainability
has matured, so have our goals. Getting
the fundamentals right means we can
also drive outperformance. Our ambitions
stem from engaging with our stakeholders,
understanding the megatrends society
faces, and an awareness of our role as a
global corporate citizen. Our purpose-
led growth strengthens connections
with our consumers and customers. Our
partnerships, with customers, suppliers,
civil society and governments, increase
the impact we have on common goals.
We innovate to create new opportunities
and continually strengthen the safety and
quality of our products. We strengthened
our Global Safety Assurance function
during 2020 with additional resources that
also help identify and manage emerging
24
issues across our sector. Our global quality
programme reinforced standards throughout
our supply network, during a year when
we built significant additional capacity. At
the same time, our innovation programmes
progressively improve the sustainability of
our products. Our Sustainable Innovation
Calculator, which measures the impact of
our brands, highlighted the need to improve
our product environmental footprint to
support our ambitions on climate change
and water. Until recently, we prioritised
our operational footprint, reducing our
carbon emissions, increasing energy and
water efficiency and reducing waste.
We will continue that work but are more
focused on reducing product footprints.
Financial and non-financial KPIs
We assess operational and strategic progress
against key performance indicators, or KPIs.
These provide a clear direction as to ‘by how
much’ and ‘in what way’ we should achieve our
goals. Importantly, these robust measures are
reflected in management targets and are
aligned with our growth objectives and
our purpose, fight and compass.
The KPIs here address financial goals
as well as wider social, environmental
and cultural aspects. Different business
functions measure progress against
specific targets in areas such as supply
chain performance, customer satisfaction,
product innovation and other efficiency
measures. These are built into managers’
personal objectives and reviewed regularly.
Integrating environmental, social and
governance goals
Our approach embeds non-financial
performance into our business while
meeting growing consumer and stakeholder
expectations. Our organisational model
Reckitt Annual Report and Accounts 2020
strengthens collaboration between Global
Functions and markets, helping us to deliver
financial, environmental and social goals within
a strong governance framework. Our Executive
team reviews progress to continuously drive
performance and our impact in society.
Social and environmental impact is
increasingly embedded in our product
innovation, our ways of working, and in
our partnerships. Our partnerships reflect
the complex networks and ecosystems
we are part of. They amplify our collective
efforts for greater shared impact.
As we close our 2020 targets we have
made progress but know there is more to
come. Looking forward, we are increasingly
connecting our financial and non-financial
goals. Our sustainability ambitions for 2030
are to reach half the world with products that
contribute to a cleaner, healthier world and
to engage 2 billion people in programmes,
partnerships and campaigns that create
a positive impact and support the SDGs.
Collectively these are both an opportunity
for growth and positive societal impact. Our
three areas of activity: purpose-led brands; a
healthier planet; and a fairer society, are the
platforms through which we will deliver this
growth and impact. Product innovation will
meet the growing needs and expectations
of consumers and society. Our actions on
climate change build both resilience and
opportunity for the future, for example within
a low carbon economy. Our work to enable
a fairer, more diverse and inclusive society
can strengthen economies, livelihoods and
communities while also enabling core values
within society. More details of our sustainability
ambitions for 2030, and the full details of our
targets, our approach and performance are
available at www.reckitt.com/sustainability.
 S T R AT E G I C R E P O R T G OV E R N A N CE F I N A N C I A L S TAT E M E N T S

C A S E S T U DY

EMBEDDING
SUSTAINABILITY
IN PRODUCT
INNOVATION
Our Sustainable Innovation Calculator
(SIC) strengthens how we measure
our environmental footprint and use
of ingredients, raw materials and
packaging. This provides quantitative
metrics and tracks progress to ensure
our innovation programmes align with
our sustainability goals.

The SIC informs development decisions

by comparing the impacts of new
products against existing benchmarks,
such as our carbon footprint, water
impact or ingredients. 30% of our
portfolio is already ‘more sustainable’.
In 2020, we updated the calculator
to strengthen measurement of the
ingredients used, green chemistry and
packaging. This will help deliver our
ambitions for 2030, delivering more
sustainable products to consumers, while
reducing our chemical footprints and
improving use of more sustainable
ingredients and packaging.

Reckitt Annual Report and Accounts 2020 25

 K E Y P E R F O R M A N C E I N D I C AT O R S C O N T I N U E D

FINANCIAL ORGANISATION
LFL Net Revenue Growth1 Adjusted Operating Gender diversity Lost Work Day Accident
Profit Margin1 Rate (LWDAR)
KPI: An indicator of strong sales KPI: An indicator of brand strength KPI: Percentage of female senior KPI: Number of incidents resulting in at
execution, innovation and customer and return on investment in innovation managers in our global workforce2. least one lost day of work per 100,000
service. and marketing. hours worked.

2020 11.8% 2020 23.6% 2020 30% 2020 0.050

2019 0.8% 2019 26.2% 2019 26% 2019 0.076
2018 3% 2018 26.7% 2018 25% 2018 0.084
2017 0% 2017 27.1% 2017 24% 2017 0.121
2016 3% 2016 27.8% 2016 20% 2016 0.084

Goal/Target: to rebuild consistent Goal/Target: our plan outlined a Target to 2022: 40% Goal/Target: Continued decrease of
mid-single digit growth in the reduction in 2020 and 2021 and then Company wide, our gender balance is LWDAR rate.
medium term. recovering to the mid 20s by the currently 49% female and 51% male.
mid-2020s.

Adjusted diluted EPS1 FCF Conversion1

KPI: An indicator of overall success. KPI: A strong link to an efficient capital

structure and well managed working
capital.

2020 327.0p 2020 131%

2019 349.0p 2019 87%
2018 339.9p 2018 84%
2017 316.9p 2017 94%
2016 287.6p 2016 93%

Goal/Target: to achieve consistent Goal/Target: to maintain the delivery

7-9% earnings per share growth as we of strong free cash flow conversion
deliver mid-single digit revenue growth over time.
and improving margins over time.

1. 2016, 2017 and 2018 figures are as originally reported within the relevant periods
and have not been adjusted for any subsequent updates made to IFRS
2. Represented in our Senior Management Team, Global Leadership Team, and Group
Executive Committee including our CEO and CFO
3. Excluding our Infant and Child Nutrition (IFCN) business – See Reckitt Insights
(https://www.reckitt.com/sustainability/) and Reckitt Reporting Criteria Basis for
Preparation (https://www.reckitt.com/sustainability/policies-and-reports/) for details
4. Calculated for 12 months ending 30th September 2020
5. 2019 and 2020 year end zero waste to landfill performance includes IFCN sites.
6. Manufacturing and warehousing only

26 Reckitt Annual Report and Accounts 2020

 S T R AT E G I C R E P O R T G OV E R N A N CE F I N A N C I A L S TAT E M E N T S

SOCIETY
Purpose-led brands
KPI: Total number of people informed
through health and hygiene messaging
and campaigns since 2013.
Social impact investment
KPI: Total value of cash contributed,
employee time in working hours and
in-kind product donations valued at
cost to the business.
ENVIRONMENT
GHG emissions per unit of
production3,6
KPI: The percentage reduction in
Greenhouse Gas emissions per unit of
production, against our 2012 baseline.
Water use per unit of
production3,6
KPI: The percentage reduction in
total water consumption per unit of
production, against our 2012 baseline.

2020 1.4bn 2020 £52.8m 2020 53% 2020 39%

2019 1.0bn 2019 £12.2m 2019 42% 2019 37%
2018 0.8bn 2018 £14.4m 2018 35% 2018 38%
2017 0.6bn 2017 £10.5m 2017 31% 2017 37%
2016 0.4bn 2016 £5.2m 2016 22% 2016 32%

Target to 2025: Inform 1 billion people Target to 2025: £20m per year. Target to 2020: 40% reduction. Target to 2020: 35% reduction.
through health and hygiene educational
programmes and behaviour change
communications.

Product innovation3,4 Sending zero waste to Manufacturing waste per

landfill5
KPI: Total Net Revenue from more KPI: The percentage of our factories
sustainable products. achieving zero waste to landfill,
including both hazardous and
non-hazardous waste.
unit of production3
KPI: The percentage reduction in
manufacturing waste per unit of
production, against our 2012 baseline

2020 30.4% 2020 96% 2020 28%

2019 24.6% 2019 96% 2019 27%
2018 18.5% 2018 93% 2018 26%
2017 18.2% 2017 100% 2017 21%
2016 13.2% 2016 97% 2016 20%

Target to 2020: 33% of Net Revenue. Target to 2020: 100%. Target to 2020: 30% reduction.

Carbon footprint per Water impact per dose of

dose of product3
KPI: The percentage reduction in our
total carbon footprint per dose of
product sold against our 2012 baseline.
product3
KPI: The percentage reduction in water
used during the product’s life cycle,
adjusted to reflect water scarcity, per
dose of product sold against our 2012
baseline.

2020 18% 2020 13%

2019 6% 2019 4%
2018 4% 2018 -4%
2017 2% 2017 8%
2016 0% 2016 6%

Target to 2020: 33% reduction. Target to 2020: 33% reduction.

Reckitt Annual Report and Accounts 2020 27

 O U R CO N S U M E RS

28 Reckitt Annual Report and Accounts 2020

 S T R AT E G I C R E P O R T
PUTTING
CONSUMERS
FIRST
Consumers buy brands
they trust. Rightly, they
expect safe, effective and
sustainable products, at a
fair price. They also want to
be sure that the products
they buy are responsibly
sourced and won’t damage
the environment. And that
the business behind them
is playing its part to tackle
global issues and support
a sustainable future.
G OV E R N A N CE
How we engage
Consumers want great products and they put
their trust in their favourite brands. Our brands
are trusted by people all over the world, and
we work hard to earn that trust.
Consumers today know a lot more about
how the world works and that affects
their choices. With better information,
they expect more from us and our brands.
They are not satisfied by warm words and
look for more assurance backed up by
concrete commitments and actions.
We share that expectation. We seek to
understand, mitigate and preferably avoid
any negative impacts while maximising our
positive impact on society. Beyond that,
our purpose is to make things better in the
relentless pursuit of a cleaner healthier world.
We exist to protect, heal and nurture.
And we fight for access to the highest-
quality hygiene, wellness and nourishment,
because we believe that’s everyone’s right.
By reaching more consumers, in different
markets, we will also increase our impact with
the growth of our business. Our ambition
is to reach half the world by 2030 with our
purpose-led brands, engaging 2 billion people
through our programmes and campaigns
to promote a cleaner healthier world. Our
brands are at the heart of the social and
environmental impact we create, and we
focus on enabling a healthier planet and fairer
society. In doing so, we help to deliver the
Reckitt Annual Report and Accounts 2020
F I N A N C I A L S TAT E M E N T S
UN’s Sustainable Development Goals. Most
importantly, and reflecting James Reckitt’s
heritage, we create social impact in the
lives of people we serve, our consumers,
their families and their communities.
Our compass guides our direction
and the value and behaviours we adopt.
The goal of always doing the right thing
underpins all our actions. Putting consumers
and people first is a guiding principle.
Sustainable products, plastics reduction
and improved reuse and recycling have
moved up the consumer agenda. Combatting
climate change is central to expectations
to build back better after the pandemic.
Awareness of biodiversity and calls for
ecosystem protection have also grown.
We are responding on all of these fronts.
Societal impact and sustainability are
at the heart of our business strategy and,
alongside quality and value, are increasingly
important consumer expectations. We invest
in brand innovation that maximises consumer
benefits and delivers positive impacts for
society-at-large, aiming for new products
that do more for consumers and for society.
On climate change, we have increased our
ambitions and are making quicker progress
to reduce carbon emissions and support
a healthier planet. Within our business and
in our value chain we are enabling a fairer,
more diverse and inclusive society.
29
 O U R CO N S U M E RS CO N T I N U ED

Responding to COVID-19
Reckitt became a key strategic supplier in
the fight against the spread of COVID-19.
Our priority was to reduce transmission while
keeping people safe and addressing the
stresses faced by consumers and communities.
We launched the myth-busting COVID-19
facts.com website and published warnings
on improper use of disinfectants. We
commissioned a major scientific study, which
confirmed the virucidal effectiveness of our
brands. Through Dettol, we also launched what
became the largest public health campaign in
history. Dettol’s #HandWash Challenge began
in India in April. By the end of the year, it had
garnered over 125 billion views on TikTok.
Maintaining stock availability
As the pandemic took hold, consumer
demand for Dettol, Lysol and other market
leading hygiene brands escalated dramatically.
We had anticipated the demand surge
in January and worked hard to ramp up
supply. We maximised output. Production
moved to a 24-hour, 7-day-week schedule
at 35 of our factories. We also adapted
and reconfigured production lines where
possible to meet the emerging challenge, for
example in Thailand, where our Durex lube
production line was rapidly repurposed to
meet the growing need for hand sanitiser.
It’s still hard to gauge whether all of this
heightened demand for hygiene products
will be reflected in a more permanent
shift in consumer behaviour. However,
we recognise that any future pandemic
will rapidly expand demand. We are
therefore making additional investments
now to increase the capacity of COVID-19
critical products such as disinfectants,
sanitisers, soaps and surface cleaners, and
to enhance our production flexibility.
Safe, effective and sustainable products
Consumers have always valued safety and
now increasingly they value the sustainability
of the products they choose. They want
products that are more effective and
that they trust not to harm them or the
environment. Those that can afford to are
willing to pay a premium for products that
are more sustainable. And expectations
of basic performance are rising too.
Reckitt’s innovation programme
accelerated activity in 2020. It centred on
developing more sustainable products,
ingredients and packaging while building in
safety by design and maintaining effectiveness.
For all our brands, we’re researching even
safer and more sustainable alternatives. We’re
introducing products that preserve and, where
possible, improve efficacy while using more
We extended the Durex Naturals range of
paraben and glycerine-free lubrication into the
US under the KY brand in 2020. Durex also
launched paraben-free intimate wipes in
European markets to help protect women from
infection and sexually transmitted disease.
Earning trust
Trust originates from our safe and effective
brands and is reinforced by our attention
to wider issues that matter to consumers
and society as a whole. Our sustainability
commitments, on climate change, plastics,
the circular economy and human rights,
resonate strongly with our consumers and
customers. They want to know that the
issues they believe in are important for the
company that makes their favourite brands.
But our sustainability agenda is not
just about satisfying consumers. Broader
considerations inform and infuse our approach,
such as the increasing connection between
a healthy planet and healthy lives for us all.
We are trying to address a broad range of
sustainability challenges to select, develop,
make and sell products that advance the
cleaner, healthier world we want to see.
We want to build a more prosperous and
resilient future for our company and society
with purpose-led brands and initiatives that
improve people’s lives and put the planet first.

The pandemic posed unique challenges
for global supply chains, which rely on steady
supplies from numerous suppliers and
shipping companies. Sourcing components
and ingredients became a key problem across
the industry. Our Jingzhou factory in China for
instance gets over 100 different parts and raw
materials from outside suppliers. When its usual
suppliers ran out of stock our supply teams
had to scour the markets for alternatives, and
then qualify them to make sure they reached
our quality thresholds. They succeeded.
At times, getting these supplies meant
moving tons of raw materials across
continents, if necessary by air freight.
But cost was a secondary consideration.
Maintaining production and supply to
consumers remained the priority.
Our production centres worked flat out.
Many of them had to find ways to do this
while complying with strict social distancing,
quarantine and curfew regulations. And of
course, we also had to keep our people safe.
These were exceptionally challenging
conditions, which tested our processes as
never before. Global demand for Lysol and
Dettol rose significantly. During some periods,
it didn’t matter how much we produced,
everything was selling out. We achieved
tremendous output growth in a very short
time-frame and have learnt important
lessons about resilience and flexibility.
125bn
natural ingredients. Our first natural-based
laundry brand in the US, UK and Spain in 2020
is an early example of this research. Botanical
Origin appeals to eco-conscious consumers
with a natural-based cleaning product that
delivers performance which appeals to all.
Air Wick’s Botanica range of oils,
sprays, candles and reed diffusers are all
based on natural ingredients. From 2021 views on Dettol’s #HandWashChallenge
onwards, over half of the feedstock for the on TikTok
entire Air Wick range of liquid electricals
will use renewable ingredients.
In October, Dettol launched its first ever
alcohol-free hand sanitiser. It uses bio-
renewable active ingredients, including lactic
acid sourced from cane sugar, and citric acid
sourced from corn, to boost efficacy. The
sanitiser has been proven to kill 99.9% of germs,
bacteria and viruses and is effective against
COVID-19. Following its successful launch in
China it will be rolled out internationally in 2021.
We’re acting to make our products as
safe as they can possibly be, with strict
controls on their development and testing.
We are also developing products to take
greater account of consumer preference. The
Mucinex Free From cold and flu decongestant
spray wax launched in 2020. This provides
effective relief for adults and children over
12 and is especially designed for consumers
that prefer to avoid alcohol or sugar.

30 Reckitt Annual Report and Accounts 2020

 S T R AT E G I C R E P O R T G OV E R N A N CE F I N A N C I A L S TAT E M E N T S

C A S E S T U DY

#HANDWASH
CHALLENGE
Dettol’s #HandWashChallenge campaign
became a vivid display of the power
of the TikTok platform for younger
demographics. Dettol India kicked off
the campaign by inviting Bollywood
celebrities and some of India’s top
TikTok influencers to upload their own
dance-based interpretations of the
handwashing rap. The campaign went
viral and soon, not just young people,
but grandparents, health workers, all
demographics were uploading videos.
In just four days #HandWashChallenge
had nearly 9 billion views. Dettol rolled
out geo-specific versions for countries
in Asia, Africa and the Middle East. By
the end of the year, it had racked up
more than 125 billion views. There were
over 75 million unique videos as people
all over the world uploaded their own
rhythmic interpretations of correct
handwashing techniques. And it didn’t
end there; #HandWashChallenge spread
beyond TikTok too, with over 565 million
video shares across the internet.

Reckitt Annual Report and Accounts 2020 31

 O U R CU S TO M E RS

32 Reckitt Annual Report and Accounts 2020

 S T R AT E G I C R E P O R T
FOSTERING
STRONGER
CUSTOMER
RELATIONSHIPS
Our interests overlap with
those of our customers.
Both of us want to serve
shopper and consumer
needs. We foster multi-
level, cross-functional
relationships that help us
pinpoint shared strategic
objectives, and improve our
operational performance,
execution and availability.
G OV E R N A N CE
How we engage
Healthy, mutually beneficial relationships
are based on more than category and
brand sales, they are grounded in a shared
sense of purpose. We express our purpose
through the innovations we deliver, by
meeting consumer needs, and by making a
difference with our brands to the categories
in which we operate. And we develop
those categories more effectively by
working closely with our retail customers.
Customers prefer to work with agile
manufacturers that have transformational
ambitions for their brands and categories.
And having closer connections with
customers brings other benefits too.
When our customers tell us how what
we do looks to them it’s a chance to improve.
They are the retail specialists, and they know
what their consumers want. They have
insights that can spur product innovation.
Our top 25 customers contribute around
a third of net revenue. We’ve invested
significantly more time and resources in
developing these customer relationships
during 2020.
The appointment of a global chief
customer officer at executive board level has
added weight and focus to this effort. He is
supported by CCOs for North America and
International Customers, each managing the
leading customers in their respective regions.
Reckitt Annual Report and Accounts 2020
F I N A N C I A L S TAT E M E N T S
Depending on the profile of the customer,
we coordinate our largest relationships globally,
regionally or nationally. At the operational level,
we have substantially expanded our customer-
facing teams to provide multi-disciplinary
support to our major North American and
international customers. We aim to grow
mutually beneficial long-term relationships by
building structural partnerships and vertically
integrated networks with our customers.
Strong relationships start from the top.
Top-to-top meetings help articulate shared
objectives built on a common sense of
purpose. We run strategy workshops with
key major customers to identify areas of
common interest. We are uncovering more
ways to meet customer priorities by deploying
our brands to address their priorities.
Strong structural partnerships and
relationships are fundamental. Our
customers can draw on the expertise
of category, shopper, sustainability,
operational, channel and format, and
regional specialists. It means that when
there is a specific issue, they have someone
with relevant expertise who can articulate
and advance their interests at Reckitt.
33

Where we engage
Globally, our major physical trading channels
include hypermarkets and supermarkets,
pharmacies, drug stores, traditional trade
and emerging trade (including discounters,
convenience stores, mother and baby
stores, travel and speciality retail). Online,
we have well over 1,000 e-commerce
customers. Our brands are on all the
main portals, we trade via marketplace
platforms, through physical retailers’ digital
presence and via e-pharmacy outlets.
Supermarkets are our primary channel
in North America and developed markets,
particularly for Hygiene. In Europe,
supermarkets are the primary channel
for hygiene and home products, while
pharmacy is the largest single channel
for our health and wellness brands.
It is still the case that most sales are made
through physical outlets, but online presence
is getting more important. Many large retailers
have already adjusted their business models
and those that have not will need to pivot
quickly to omnichannel fulfilment to remain
competitive. We are matching this change
by developing an omnichannel approach
to category and customer engagement.
Small independents with relatively
few chain outlets make up the bulk of the
pharmacy sector. This remains the primary
channel for our health brand portfolio in many
territories. We have built up an extensive
network of expert local representatives
who manage these relationships, and the
cross-selling and detailing of our brands.
In e-commerce, we will often invest
in building ever closer partnerships. Our
digital customers promote our brands
online through their e-commerce outlet,
but we also generate revenue for them
by investing in media space on their
platforms. As we sell more on a platform
we often spend more on media space.
Whether the sales channel is online or
offline, we aim to identify synergies at the
strategic level, promote purpose-led innovation
and invest in partnerships and networks
that enhance and expand our categories.
34
O U R CU S TO M E RS CO N T I N U E D
Joint value creation
The leadership team made purpose-driven
customer engagement a corporate priority in
2020. We focused on building strategic retailer
partnerships founded on common purpose.
We identified common areas of interest and
windows of opportunity through numerous
top-to-top meetings and strategic workshops.
Engagement is coordinated centrally to ensure
customers connect with a unified Reckitt voice
and have access to cross-functional and cross
business unit support. Our digital capability
allows us to deliver omnichannel support to
customers and is a key engine for growth.
We find synergies when we work with
customers on areas of common interest.
This purposeful, coordinated approach is
driving improved performance both within
existing categories and in new spaces.
Walmart is one of several big retailers
with sustainability goals that mirror Reckitt’s
approach. In September 2020, it announced
plans to become a regenerative company
targeting zero emissions by 2040. Its ambitious
goals for regenerative agriculture, the circular
economy and improved conditions for
suppliers are consistent with our approach at
Reckitt. The two companies work together
to advance their shared agenda. For instance,
following Walmart’s 2019 commitment to a 10%
reduction in its chemical footprint by 2022, we
contributed to that goal by reformulating our
fragrances to make them more sustainable.
We are embracing the digital revolution as
we continue to invest in marketing expertise.
In October 2020, we launched our virtual
interactive Marketing Excellence Village. We
invite partners and selected customers here
to share and discuss our values, plans, and
visions virtually in various online buildings. Our
teams hold quarterly town halls in our main
events building, the Curve. We discuss insights,
data and analytics in the Hive; collaboration in
the Design Lab focuses on brand experience;
we meet in the Stack to discuss data-driven
marketing and media topics; in the Forum for
Good we work on purpose-led brands; and in
the Academy we concentrate on marketing
capabilities and operations. The cutting-edge
concepts mapped out in the Village are carving
out new ways of working in the digital arena.
Reckitt Annual Report and Accounts 2020
Safer, cleaner retail spaces
In 2020, as society grappled to control
the spread of COVID-19, physical retailers
suffered as social interactions declined.
Surveys revealed that some 60% of shoppers
felt anxious about being in stores after
lockdown. Not surprisingly, most retailers
experienced a radical reduction in footfall.
We worked with key strategic partners
in the pharmacy and drugstore sector to
reassure consumers by creating safer, more
hygienic spaces. We introduced front-of-store
sanitisation stations, put health and safety
advice at strategic, in-store locations and
installed protective zones for those waiting
for prescriptions. We also worked with retailers
to safeguard business areas and protect
employees. Some retail partners introduced
dedicated hygiene zones within their stores,
which provided a focus for Reckitt brands.
Growth in e-commerce
With widespread lockdowns and social
distancing in place to combat COVID-19
many consumers turned to digital channels
for their groceries and provisions. Online
sales experienced double-digit growth
during the year. Our e-commerce
operation continued to outperform: online
operations now account for 12% of our
global sales, a significant uplift since 2019.
The global pandemic turbo-charged online
growth this year, but most analysts agree
this was not a one-off event, rather, it has
accelerated an underlying consumer trend.
Much of this growth is now baked in and
expected to remain when social distancing
constraints ease. According to data from
IBM’s US Retail Index, the pandemic has
accelerated the shift from physical stores
to digital shopping by roughly five years.
Having already built a strong e-commerce
capability Reckitt was equipped to respond
quickly and flexibly to the rapid changes
we saw during the year. As physical
retailers migrated their offers online, we
were able to adapt our supply chain and
core offerings to maintain access to our
products via multiple online channels.
Reckitt has strong relationships with
all the major global marketplace platforms,
like Amazon, Alibaba and JD.com. A mix
of 1P/3P, these platforms constitute our
largest online channel. They account for
more than half of Reckitt global online
sales. We deploy advanced analytic and
automation tools to optimise revenue here.
 S T R AT E G I C R E P O R T
Omnichannel/eGrocery retailers, our second
major channel, returned the highest level of
absolute growth in 2020. All large physical
retailers are now leveraging their strengths in
geographic reach and scale and developing
omnichannel strategies. We can call on the
multi-disciplinary skills and resources we’ve
developed for marketplace online platforms
to help them succeed in the digital arena.
In some domestic markets, the
unemployment and job insecurity caused by
the crisis reduced consumer demand. Cross-
border platforms with full localisation and
familiar payment options helped our brands
attract consumers in international markets.
We are also building direct online relationships
with consumers for our brands on a growing
number of direct-to-consumer (DTC) channels.
C A S E S T U DY
AMAZON EVENTING
Amazon Global Events have gained traction
as key staging posts for global
e-commerce. This year, with the COVID-19-
led boost in e-commerce, they took on
even greater significance. We coordinated
preparation and execution for these events
globally. In 2020, the coronavirus delayed
Prime Day from July to October, moving it
perilously close to the Black Friday-Cyber
Monday dates. Our planning had to adapt.
Our strategy enlisted over 1500 people
during a 13-week lead-up that combined
channel, supply chain, advertising and
finance elements. Teams were equipped
with advanced tools to enable automated
website scraping, real-time performance
tracking, and AI media buying.
G OV E R N A N CE F I N A N C I A L S TAT E M E N T S
12%
E-pharmacy is another fast-growing channel.
There has also been rapid development in the
newly emerging ultrafast channel over the last
two years. These on-demand platforms are
attracting consumers by delivering products
within minutes not hours. We are adapting to
these challenging delivery criteria by mobilising
highly responsive supply chains that can meet of global sales come from
these requirements. our e-commerce activities
For each of these channels, we’re
developing closer customer partnerships
and building up our brands.
Consumers’ needs are evolving rapidly.
And we have to be ready to respond
at pace. To do that, we’ve designed
our e-commerce operation to be fluid,
adaptive and to share expertise globally.
This is a highly dynamic environment where
today’s innovation can be outdated in
months. We take nothing for granted.
Eventing execution was a huge collaborative
effort involving 23 countries, 43 teams and
multiple bots working 24/7. Many of our
brands outperformed, with Finish, Durex
and Enfamil all exceeding expectation.
We saw stellar performance from our
Dettol and Lysol brands which achieved
triple-digit, year-on-year growth.
Our combined experience and expertise
have created a multiplier impact on a global
scale for these events. Our eventing
execution continues to improve. We’re
learning more each year, building on our AI
capabilities and locking in increasing levels
of automation.
Reckitt Annual Report and Accounts 2020 35
 O U R I N V E S TO RS

36 Reckitt Annual Report and Accounts 2020

 S T R AT E G I C R E P O R T
ENGAGING
INVESTORS
Our long-term financial
resilience depends on
the continuing support of
the investor community.
It supports and sponsors
our activities with
the provision of debt
and equity. We aim to
communicate transparently
with all investors so they
understand and remain
aligned with our strategy.
G OV E R N A N CE
Why we engage
Our investment community includes current
and potential shareholders, mainly institutional
and retail investors, as well as ‘sell-side’
research analysts, banks and ratings agencies.
Our investors, as owners of the business
are a critical stakeholder group and are the
providers of the financial capital – equity or
debt – that underpins our business and allows
us to successfully execute our strategy. In
return for this, they expect to earn good
financial returns. These can be in the form of
dividends, capital appreciation or interest.
The cost of equity or debt is influenced
by the quality of perceived risks. Maintaining
an open, constructive dialogue around
these issues is key so that investors can
make appropriate decisions about the
returns they can expect over time.
It is important that all market participants
have equal and timely access to information
from the company and as such, we are
committed to engaging transparently as
we forge ahead with building a renewed
purpose-led business that is sustainable for
the long term. Our Investor Relations team is
key in maintaining this dialogue and ensuring
that there is a wide array of information
accessible, be it online or through recognised
platforms for the investment community. It is
also the responsibility of the IR team to ensure
the Information provided is compliant with
market abuse regulations and guidelines. In
addition to the active responsibilities of the
Reckitt Annual Report and Accounts 2020
F I N A N C I A L S TAT E M E N T S
IR team, our corporate website has played
a central role in ensuring our retail investors
have access to the same information at the
same time as our institutional investors.
Communication challenges with COVID-19
Over the past year, we have strengthened our
IR team in recognition of our commitment to
this area. The individuals within the team,
together, bring over 50 years of corporate and
capital markets IR experience gained from
working across a range of companies and
industries. Over the last twelve months, the IR
team has developed stronger processes and
channels of communication, including adapting
and evolving the delivery of the IR programme
to overcome the restrictions imposed by
COVID-19. As a result of this, the team has had
to be nimble and creative in its conversations
with stakeholders as it has been more
important than ever to deliver and provide
useful and timely information to the market.
We have delivered a proactive IR
programme and have met our financial
reporting obligations through a combination
of one-to-one meetings, group meetings,
webinars, roadshows, conferences, round
tables and fireside chats this year.
Beyond this, we have broadened our
communication channels to all of our
stakeholders through the use of regular
e-Newsletters, fact sheets, presentations
and broader updates to comment on
recent and upcoming IR activity.
37

Despite COVID-19 restrictions driving much of
our interaction online, in some ways, it made it
much easier to engage with our global investor
base and shareholders as we were able to be
more flexible with allocating our time across
the varying time zones. We look forward to
holding face-to-face meetings again in the
future, but it is likely that going forward, we
may retain some of the benefits of more
screen-based interactions as it has introduced
a level of efficiency and flexibility as we better
embrace digital IR communication.
Explaining our strategy
The strategy laid out by our CEO in February
2020 has brought renewed interest in
Reckitt. Throughout the various meetings
led by our CEO, CFO and the IR team, we
focused on laying out our plans, including the
required investments, delivery milestones
and long-term goals. With the emphasis on
clear corporate purpose and fight at the
heart of our transformation, it was important
to explain our strategy in the context
of the impact that the ensuing market
developments were having on the business.
Presciently, in the strategy update in
February, our CEO stated that hygiene was the
foundation of health. As the pandemic took
hold across the world in early Spring 2020,
the subsequent focus on disinfectant and
germ protection and the role of our portfolio
of category leading and heritage brands in
managing the spread of the virus could not
have been better predicted or be more fitting.
Our engagement activity in 2020
Given 2020 was a year like no other, it was
necessary to adapt the investor engagement
programme to meet the needs of transferring
to the new virtual environment. We organised
extensive engagement programmes with
holders and non-holders alike. In 2020, we held
over 300 meetings, with over 1,000 investors,
representing over 350 institutions. As a result of
the pandemic and ongoing social distancing
practices, the meetings since mid-March have
all been virtual.
They included one-to-ones, large and
small group meetings, as well as regional
meetings with international investor groups.
We conducted investor meetings with
a global investor base. For example, we
held a virtual roadshow with Paris based
investors. This consisted of two mornings of
meetings with 17 different French investors.
Similarly, we held virtual roadshows for
Australian, German, Scandinavian and Spanish
investors, which gave us the opportunity to
meet with many funds in these regions.
38
O U R I N V E S TO RS CO N T I N U E D
For each of our quarterly results, we hold a
presentation for analysts, investors and other
interested parties, followed by a live Q&A. The
full RNS, presentation and script are uploaded
In 2020, we held over 300
to our website shortly after the event, so that meetings with over 1000
investors can spend time pouring over the
details further, if they so wish.
investors, representing
With meetings being held virtually, we were over 350 institutions.
able to participate in numerous conferences
hosted by the various investment banks. This
facilitated connection with a wider volume
of investors than we might typically have
Understanding investor views
seen during the weeks after reporting.
In July, we completed the re-organisation
In total, we hosted presentations or
of the business into three business units
attended meetings at over 15 conferences
– Hygiene, Health and Nutrition. Investors
in 2020. The conferences were all heavily
were keen to gain insight into the underlying
oversubscribed. Some of the conferences
trajectory of the businesses and our ambitions
included key industry events on the annual
and priorities for sustainable growth. Our
conference agenda such as the Deutsche Bank
growth enablers and growth drivers featured
Global Consumer Conference; the JP Morgan
high on their list of discussion points. Many
Flagship Consumer & Retail Conference; the
wanted to delve deeper into subjects like
Morgan Stanley Global Consumer and Retail
innovation, the development of our core
Conference and the Sanford Bernstein Pan-
category market units (CMUs) and the
European Strategic Decisions Conference.
new Global Business Services channel.
Beyond the conferences, it was
With the significant changes to the senior
important that shareholders had access
leadership team over the year, investors
to management on a regular basis and to
have been keen to hear about how the
that end, we met with each of our top 20
culture of the organisation is changing.
shareholders consistently during the year.
To fully understand and gauge the
Fund Managers as at 31 December 2020 Holding %
views of our investors and other financial
stakeholders, we gather regular feedback
BlackRock 7.95 using third party providers. On our behalf,
the feedback company collected detailed
MFS 6.02
comments and liaised not only with the
Morgan Stanley 5.89 investors we met, but also with the sell-side
analysts who regularly write research on the
Capital Group 3.42
company. The feedback obtained, which is
shared and reviewed by the Group Executive
Vanguard 3.40
Committee and the Board, helps us to better
communicate the investment story in the most
helpful manner to our investment community.
Governance and remuneration are areas
of enduring interest and against the backdrop
of stronger interest in ESG, we spent a lot
of time addressing queries on these topics,
particularly towards the end of the year.
Reckitt Annual Report and Accounts 2020
 S T R AT E G I C R E P O R T G OV E R N A N CE F I N A N C I A L S TAT E M E N T S

C A S E S T U DY
The trust that our
employees place in the
company is underlined
by the high proportion
that own shares in the
company – which, at
around 55 percent of the
workforce, is amongst the
highest for a publicly
owned, UK-listed
company.

Employees as shareholders
At Reckitt, employee interests are aligned ‘A GOOD HOUSE Articulating strategy at the Morgan
Stanley Global Consumer & Retail

IN A GREAT
with those of our institutional and retail Conference
shareholders. The trust that our employees In Laxman Narasimhan’s fireside chat at
place in the company is underlined by the the Morgan Stanley Global Consumer &

NEIGHBOURHOOD’
high proportion that own shares in the
company – which, at around 55 percent of
the workforce, is amongst the highest for
a publicly owned, UK-listed company.
We have three separate plans which cater
to our global workforce – the UK Sharesave;
the US Plan and the GSPP (Global Stock
Purchase Plan), which is for all other countries
outside of UK and US. Our Group Leadership
Team has share ownership requirements to
increase alignment between management
and shareholders and ensure focus on
long term sustainable shareholder value.
Looking ahead
We will be looking to launch further initiatives
in the coming year and will continue to adopt
as flexible an approach as is necessary.
We will focus on building and enhancing
our IR digital interaction and as COVID-19
restrictions continue, we will seek to use
the corporate website and video interaction
in more innovative ways to showcase
the business and our strategy and to
highlight the breadth of our portfolio.
ESG will also form a bigger part of our
2021 investor relations programme as we
roll out new targets. We will also look to
uncover our heritage stories further and
bring the richness and the great history
of our brands to all of our stakeholders.
Reckitt’s strategy
set out, pre-COVID-19,
in February had focused
on building long-term
sustainable returns with
an initial emphasis on
improving execution.
Retail Conference in December 2020 he
connected with international investors to
outline Reckitt’s business transformation
strategy and review its performance
at the end of an eventful year.
He began by reminding his audience that
Reckitt’s strategy set out, pre-COVID-19, in
February had focused on building long-
term sustainable returns with an initial
emphasis on improving execution. He
explained that the impact of COVID-19
had in fact accelerated transformation and
made the company more confident that
it would achieve its objectives sooner.
Laxman highlighted five tailwinds that
supported the company’s positioning:
hygiene as the foundation of health,
the increase in sexual health concerns,
the growth in self-care as public health
comes under pressure, the need
for nutrition solutions – for infants
and, increasingly, for seniors – and
the continuing disruptive effects of
technology and in the digital arena. He
explained why Reckitt is well-placed in
all of these areas and took questions on
how Reckitt intended to drive organic
growth and improve shareholder returns.

Reckitt Annual Report and Accounts 2020 39

 OUR PEOPLE

40 Reckitt Annual Report and Accounts 2020

 S T R AT E G I C R E P O R T
INSPIRING AND
SUPPORTING
OUR PEOPLE
The talented people who
work at Reckitt want to
make a difference in the
world. They are inspired
by our purpose and our
fight, and guided by
our compass. We give
colleagues the space,
the opportunities and the
chance to have a real and
positive impact. It’s what
we call Freedom to Succeed.
G OV E R N A N CE
How we engage
Our success as a business is founded on
our strong, distinctive culture. We want all
colleagues to have a sense of belonging
and take personal pride in what they do.
Our approach is anchored by our purpose:
the relentless pursuit of a cleaner, healthier
world. The behaviours we share are
guided by our compass; doing the right
thing, always, is fundamental for everyone
here. Our Freedom to Succeed employee
value proposition aims to instil, promote,
reinforce and reward the positive behaviours
and attributes that make that real.
Our focus is on maintaining an open,
positive, inclusive culture by promoting
continuing dialogue across the company.
We forge connections across the company
in many different ways: via site visits, at
virtual townhalls and through surveys, forums
and focus groups for special interest areas.
Maintaining rich and active communications
across the company is a priority for Laxman
Narasimhan, our CEO. His popular car-pool
conversations – informal chats with team
members on the commute to work – were
halted by COVID-19, but he along with other
senior leaders continued to connect with
colleagues with regular, screen-enabled sofa
chats and through the Stronger Together
series. All colleagues are encouraged to
connect directly with senior leaders, via
email and in live-streamed Q&A sessions.
Reckitt Annual Report and Accounts 2020
F I N A N C I A L S TAT E M E N T S
The pandemic constrained site visits this
year, but the leadership team and Board
directors held regular virtual focus groups,
townhalls and broadcasts with our teams.
We ran virtual onboarding sessions for
new GEC members, which included tours
of key markets. There were also regional
and domain-specific meetings with
general managers and function leaders.
On social media our active LinkedIn
presence is followed by over 30,000
Reckitt employees. There is also high
employee engagement on other social
channels and increasing interaction
on internal social platforms.
We conducted regular surveys using an
online tool, Glint, that yield detailed, in-depth
insights into employee sentiment. There were
two general all-employee surveys and three
that asked for specific, COVID-19 related
responses during 2020. Reckitt scored highly
on overall engagement. Over 70% of those
surveyed responded, including a significant
number of responses from our manufacturing
employee base. The feedback showed a highly
motivated workforce, strongly committed to
our purpose and fight. When asked to rate
how proud they were to work here, they
ranked Reckitt well ahead of our global peers.
The surveys also identified opportunities
for improving performance. Colleagues
were broadly positive about our equal
opportunities policies, our investment in
41

people and our status as a smarter, leaner
workplace, although we still have work
to do to raise the bar in these areas. This
tallies with the three key themes emerging
from employee feedback generally. First,
our people are concerned about inclusion
and the associated topics of equality of
opportunity and career development. Second,
although they were positive about currently
available opportunities they wanted more
investment in training and development. The
third strand, highlighted by the pandemic, is
a desire for smarter, more flexible working
practices. We are addressing all of these
areas in a spirit of continual improvement.
C A S E S T U DY
IN THE FRONT
LINE AGAINST
COVID-19
Jingzhou city in Hubei province is close
to Wuhan, where the coronavirus epidemic
began. It is home to one of Reckitt’s biggest
manufacturing plants for Dettol.
When Hubei went into lockdown the factory’s
products were desperately needed, but most
of its 400 workers had left the city for the
weeklong Chinese New Year (Spring Festival)
celebrations. Managers worked with the
government to get travel permits and
accommodation. Nearly 300 colleagues
agreed to come back: one worker made a
six-hour bicycle trip, another walked 13 hours.
They boosted dwindling mask supplies with
a donation from a nearby factory and put
the workers up in local hotels, where they
remained isolated for several weeks.
Everyone understood that Reckitt was
in the front line against COVID-19; the
workers gave up a lot to play their part.
The factory earned plaudits for its efforts
and was recognised with a global award
from the CEO – the Sir James Reckitt
Award – Reckitt’s highest accolade.
42
O U R PEO PLE CO NT I N U ED
Reckitt spirit
In crisis, the Reckitt spirit comes out even
stronger among our people. We saw that after
the Beirut explosion, colleagues set up online
support groups and raised over $1 million for
employees and their families. And we saw
that by how people stepped up in the face of
a global pandemic, we had factory workers
living on site to keep production going. To take
just one example, our IFCN facility in Makati
in the Philippines keep vital nutrition supplies
flowing for children under curfew conditions.
They converted office space to make ‘the
Reckitt hotel’. Some were living there for
weeks on end without seeing their families.
When we had to close our offices
colleagues adapted immediately. Face-to-face
training programmes were swapped for virtual
equivalents. Our IT specialists worked tirelessly
to get our global systems fit for purpose.
Reckitt has become a key strategic player
in the fight to stop the spread of COVID-19.
This would never have been possible without
the extraordinary efforts of so many of
our colleagues.
Leading by example
In 2020 we developed leadership behaviours
with the Group Executive Committee that
translate our compass into meaningful action.
The compass calls on colleagues to put
consumers and people first, seek out new
opportunities, strive for excellence, build shared
success and above all, do the right thing,
always. Our expectation of leaders is that they
support and reinforce these behaviours. We
ask them to own their area of the business and
make decisions that matter. They should spot
opportunities, innovating, iterating and scaling
and building better in everything that they do.
We expect them to care for their colleagues,
actively listening and including and working
together to deliver. These behaviours are
being embedded into the assessment of talent
and performance across the organisation.
Reckitt Leaders...
Own: Live our purpose, fight and compass.
Know our business. Make decisions.
Create: Spot opportunities. Innovate, iterate
and scale. Relentlessly build better.
Care: Actively listen, learn and include. Speak
direct with respect. Act to unleash potential.
Deliver: Focus on what matters. Move boldly
and at pace. Join forces to win bigger.
Diversity and inclusion (D&I)
We have over 43,500 colleagues operating in
60 countries across six continents from 120
different nations. It’s incumbent on us to work
together to embrace our diversity and build
inclusion into everything we do, not just to
create a sense of belonging within the
company but to make better connections
with the global community we serve.
Reckitt Annual Report and Accounts 2020
In 2020 we have been working hard to
make our culture more inclusive. We’ve
established a D&I board chaired by our
CEO. We also commissioned EY to give us
an external perspective on where we are
and where we could be. The EY diagnostic
included an online listening exercise with
feedback from 2,000 Reckitt people,
focus groups in different languages, and
interviews with key stakeholders, including
members of the D&I board, Group Executive
Committee and senior Reckitt leaders.
We have six workstreams in our inclusion
strategy: leadership, policies, people,
partnerships, procurement and brands. The
leadership pillar ensures that inclusion is
role-modelled, endorsed and promoted at a
senior level. Our policies should be inclusive by
design; we are reviewing these to ensure that’s
the case. The people pillar is about promoting
a fully inclusive culture throughout the
company. For partnerships, we seek out others
that develop diversity and inclusion in society.
We want to ensure our procurement policies
support suppliers from diverse and minority
communities. And we leverage the power of
our brands to help build a more inclusive world.
Gender pay report
As a UK-based group we are required by
law to produce a gender pay report which
highlights any difference between average
male and female hourly earnings. But Reckitt
goes further. In 2020, we extended our
reporting to five of our main markets covering
more than 50% of all our people. In 2021, we
will extend to a further ten markets.
Stronger Together: 6 pillars to drive inclusion
People: Building a culture of
inclusive leadership
Policies: We continuously improve
our policies to raise the bar on
inclusion
Partnerships: Building selective
partnerships
Brands: Leveraging the power of our
brands to drive a more inclusive world
Procurement: Supporting suppliers
from diverse and minority
communities
Leadership: Senior level focus and
sponsorship via a global D&I board
 S T R AT E G I C R E P O R T
Workforce Disclosure Initiative
In 2017, ShareAction and over 50 financial
institutions formed the Workforce Disclosure
Initiative (WDI) to address the demand from
investors and NGOs for greater transparency
from businesses on how they value direct
employees and those in their supply chains.
Reckitt has participated for three years. In
2020, we were placed in the top quartile for
transparency of the 140+ companies sharing
information on pay, contract types, diversity,
and their supply chains with a disclosure score
of 82% compared with the 66% sector average.

Reimagining the workplace
In common with many businesses, the
constraints on working imposed by
the pandemic have also unearthed
new possibilities.
In July 2020, we launched our Freedom
Forum, a crowdsourcing platform that
encourages colleagues globally to share
their ideas on how we can change the way
we do things. We request ideas in response
to a particular theme. These are assessed
for viability and the top five get proposed
to leadership. The theme for the first forum,
workplace of the future, attracted more
than 600 ideas and over 10,000 votes. Ideas
around how to enhance flexibility at work
was most popular. We now have a cross-
functional global team focusing on the future
of work. It’s looking not just at the practical
implications of working flexibly, but at how
it enables sustaining high impact at work
and at home and broader cultural goals.
As people spend longer working from
home, wellbeing and mental health are coming
ever more into focus. In 2020, we paused
global operations on two occasions to let
people rest and recover in a stressful year, as
well as ensuring our people have access to
assistance programmes and other tools and
resources to support individuals and build
resilience. In 2021, this will be a key focus
area when we have plans to dedicate more
time and resources to employee wellbeing,
enabling colleagues to thrive personally and
professionally. Colleagues want to find ways
to balance their workload more effectively.
We recognise that space to stand back and
sample different experiences can have a
positive impact on productivity and innovation.
G OV E R N A N CE F I N A N C I A L S TAT E M E N T S
C A S E S T U DY
STRONGER
TOGETHER
In 2020, we set up the Stronger
Together conversation series – a
five-year commitment that aims
to shine a light on the inclusion
topics that matter most to our
people. Laxman chairs employee
storytelling sessions that aim to
advance understanding across
the organisation about the lived
experience of people of colour,
women, the LGBTQ+ community,
those with disabilities and other
marginalised or disadvantaged
groups. We are also hosting
conversations with external
guests and thought leaders to
challenge our thinking and inform
our responses on these topics.
In the first of these conversations,
in May 2020, Reckitt people
spoke about the reality of being
black in America. It provoked
strong emotions and sparked
a worldwide response. Over
4,000 colleagues attended these
sessions, which have also included
conversations on LGBTQ+ and
women in STEM. Colleagues have
shown commendable courage
and openness in coming forward
to tell their stories. Their stories
have helped us all to consider
how different experiences impact
on people’s life chances.
Reckitt Annual Report and Accounts 2020 43
 O U R PA R T N E R S

44 Reckitt Annual Report and Accounts 2020

 S T R AT E G I C R E P O R T
EXTENDING OUR
IMPACT WITH
LIKE-MINDED
PARTNERS
We work with our partners
to deliver practical and
sustainable solutions that
further our purpose of
creating a cleaner, healthier
world. We want to build
lasting solutions that have
real social impact. To do
that, we look for partners
that share our purpose
and endorse our values.
G OV E R N A N CE
How we engage
Reckitt is on a mission. Our purpose – the
relentless pursuit of a cleaner, healthier world
– drives our actions and our compass guides our
thinking. That sense of purpose underpins our
sustainable business model. We further our
purpose through purpose-led brands that serve
a genuine social need. And that drives growth.
We join forces with others to build shared
success. External partners support our
efforts with expertise, objective assurance,
research and local knowledge. We forge
purpose-led alliances that link with our
categories and brands. We participate in
local and global campaigns to advance
social and environmental objectives. And
we combine with trading partners to build
efficient, resilient supply chains that meet
consumer needs and expectations.
Sparking innovation
Innovation for us is not just about making
world-beating products, it’s about connecting
with our consumers in different ways, finding
different ways to grow our business and making
a difference to society and the environment.
The best ideas can come from
anywhere, but there are natural synergies
with like-minded start-ups and small-
scale disruptors. They bring fresh thinking
and new approaches. Our knowledge
and resources can scale up their ideas.
Reckitt Annual Report and Accounts 2020
F I N A N C I A L S TAT E M E N T S
Together, we can have a lasting impact in areas
that really matter to people’s lives.
We reach out to entrepreneurs in many
different ways. In 2020, we partnered with
Startup Grind, the world’s largest independent
start-up community, at its tenth anniversary
event in Redwood City, California. We
hosted a health innovation hack there.
Reckitt mentors guided teams of
entrepreneurs and creative leaders. They
were supported by our R&D and marketing
experts. We gave them 24 hours to prepare
mental health solutions for expectant and
recent mothers, which they then presented
to an expert judging panel. As well as kudos,
the winning team won a commitment from
Reckitt to explore how to bring its idea to life.
The annual Reckitt Global Challenge
is another way we reach out to talented
innovators. Our flagship innovation competition
attracts hundreds of entries. In 2020, they
came from 32 countries on three continents.
The teams were asked for ideas that contribute
to positive social change. The national winners
went to a global final at the annual One Young
World conference. They got the chance
to work at Reckitt, with their ideas going
into our innovation pipeline and mentoring
available to support their development.
45

ACCESS VC
B Corporations are purpose-driven
organisations that want to use business as a
force for good. The over 3,500 certified B
Corps in 71 countries include some of the
most innovative and progressive companies in
the world. They are committed to combining
profit and purpose.
We want to encourage collaboration
with these independent, purpose-driven
entrepreneurs. Their objectives chime
with our own. That’s why we’ve launched
our own B Corp venture.
Access VC has been set up to be agile,
flexible and a great partner for purpose-
driven initiatives. It manages our existing
Reckitt minority stake assets, including the
Your.MD and Founders’ Factory investments.
It will be the launchpad for B Corp start-ups
in the coming years.
Access VC offers more than just venture
capital: it’s a cooperative enterprise. Purpose-
driven entrepreneurs get access to Reckitt’s
experts, brands, resources and scale.
Clinical professionals
We engage with healthcare professionals
internationally to exchange information, share
best clinical practice and sponsor research.
In South America we work with Neocosur,
a non-profit, voluntary network of around
30 neonatal units in Argentina, Brazil, Chile,
Paraguay, Peru and Uruguay. In India, we
worked with senior paediatricians and
dieticians to develop the country’s first ever
milk ladder and tackle cow’s milk allergy
(CMPA) in infants and young children. We
also conducted clinical studies with the
Department of Translational Medical Sciences
at the University of Naples Federico II to
better understand CMPA management.
In France, we worked with the paediatric,
gastroenterology and allergy department
at the Necker hospital for sick children,
Europe’s largest paediatric hospital, on
research into eosinophilic esophagitis (EoE).
We manage numerous educational
partnerships, including with Harvard School
of Public Health, the Royal Children’s Hospital
in Melbourne and SickKids in Canada. We
also share our expertise in professional
journals and at presentations for international
symposiums and congresses, including a
virtual CME Symposium sponsored by the
Pediatric College of Nuevo Leon and at the
World Congress of Pediatric Gastroenterology,
Hepatology and Nutrition in Vienna.
46
O U R PA R T N E R S C O N T I N U E D
Innovative and responsible supply chains
We seek to encourage sustainable practice
across the supply chain. To do that, we
make sure we source responsibly and
we collaborate with key suppliers and
manufacturers to advance our purpose.
Our Partners to Innovate programme aims
to promote sustainable innovation and
improve manufacturing processes.
This has included work with Dow to
develop a new polymer system for Finish
products. These use recyclable feedstock
and replace a key petrochemical ingredient
with biodegradable materials. We are
working with major polymer producers to
develop the next generation of recycled
materials for high-quality post-consumer
recycled (PCR) plastic packaging. We have
also developed 100% PCR packaging with
Banyan Nation in India for Dettol handsoap.
Manufacture 2030 is a software platform
that aims to halve resource use in global
manufacturing over the next decade. This
industry-wide, cloud-based initiative helps
to evaluate and improve the environmental
performance of manufacturers, especially
in developing markets. We joined the
platform in November 2020. We’re using
it to encourage factories and suppliers to
improve environmental performance. The
initial 289 third-party manufacturers involved
will soon be joined by others, bringing us
a step closer to improving environmental
performance across the whole supply chain.
In Africa, we partnered with leading
e-commerce platform Jumia to simplify
consumer access for health and hygiene
products. As part of this agreement,
we finance free shipping in eight
African markets, to reach consumers in
Algeria, Egypt, Ghana, Kenya, Morocco,
Nigeria, South Africa and Uganda.
And we’re increasing transparency across
our supply chains. We have worked with key
dairy suppliers, including Glanbia in Ireland
and Friesland Campina in New Zealand,
to trace milk to farm level. This provides
reassurance that key Enfa products use milk
from grass-fed cattle – an important issue
for many consumers, especially in China.
Responding to COVID-19
Trinity Challenge
In September, Dame Sally Davis, Master of
Trinity College of Cambridge, launched the
Trinity Challenge in response to COVID-19. She
was motivated by the belief that humanity has
the means to ensure future health emergencies
will not disrupt and destroy lives and
livelihoods. But to do that it must prepare now.
The Challenge aims to build a coalition
of partners that use data and analytics
to develop insights that can protect us
all against future health emergencies.
Reckitt Annual Report and Accounts 2020
Reckitt is a founding member. We’ve joined a
network of 22 leading institutions including
some of the world’s best minds and most
influential leaders from business, academia and
the social sector to help identify and evaluate
potential solutions.
Our collaborative research efforts focus on
measuring and modelling the socio-economic
impacts of pandemics and looking at the
cost-effectiveness of non-pharmaceutical
health and hygiene interventions.
COVID-19facts.com
There has been a lot of misunderstanding
about COVID-19. There have been numerous
competing narratives as the world struggled
to get to grips with a fast-moving global
pandemic. The World Health Organization has
warned of an infodemic, with misperceptions
on topics such as transmission, cures and
protective measures circulating widely.
We teamed up with the Economist
Intelligence Unit (EIU) to create a dedicated
fact-checking website that aims to debunk
common myths. Working in conjunction
with Reckitt, EIU experts have been
providing authoritative, science-based
information on the COVID-19facts.com
website since its launch in March 2020.
Advancing best practice
Illicit trade has grown well beyond the
capabilities of individual governments and
individual companies, and now demands a
sustained, coordinated response. Reckitt joined
the Transnational Alliance to Combat Illicit Trade
(TRACIT) in 2020. TRACIT is a private sector
initiative to mitigate the economic and social
damages of illicit trade and counterfeit goods.
We also worked with Route 2, to assess
the societal impact of our Durex brand.
This quantified our impact throughout the
value chain, from latex farmers through
to end-consumers, as a Total Economic
Contribution. Route 2’s analysis established
that the sale and use of Durex condoms
in 2019 had created an estimated £122
million in value through the avoidance of
deaths, unplanned pregnancies and sexually
transmitted infections and diseases.
With the Danish Institute for Human Rights
and our supplier partners, we assessed the
whole of our Durex and Enfa value chains
in Thailand to understand our impacts
and consider how we could strengthen
human rights. The DIHR report and our
associated action plan has been published.
We are continuing our work to strengthen
the human rights and livelihoods of people
in our Durex and Enfa networks in Thailand.
Our new Fair Rubber commitment is
building community benefits and economic
stability for the smallholder farmers in
Thailand and Malaysia that provide us
with high-quality latex for the brand.
 S T R AT E G I C R E P O R T
Regulatory intelligence
We engage actively in the continuing debate
on international regulatory frameworks for
nutrition, health and hygiene.
Food law and regulation is a complex and
evolving area. We are regularly consulted
on policy and participate at high-profile
educational events. For example, in 2020,
Reckitt representatives presented to a
global audience of industry professionals,
academics and regulators at a Michigan
State University programme on best
practice for food safety and regulation.
The Economist Intelligence Unit’s two
Reckitt-sponsored white papers on self-
care and the future of health continue to
influence global debate on healthcare policy.
Reckitt specialists and partner organisations
have published and presented in China,
Thailand and elsewhere on the role of self-
care and the need to maintain transparent
and consistent regulatory frameworks that
protect people and support the sector.
In Hygiene, we cooperated with numerous
regulatory and industry bodies to authorise
and approve biocidal products for use
in the battle against COVID-19. Our US
regulatory team successfully advocated for
the US Environmental Protection Agency to
publish its List N of disinfectant ingredients
expected to kill the coronavirus. After
receiving data confirming the efficacy of our
products for this specific SARS-Cov2 strain,
Reckitt worked with regulators to expedite
registration approvals. In several markets,
including Australia, the US and Canada, we
were the first to obtain this approval.
We also work with industry groups to
develop common standards and enhance
international best practice. As active
members of the International Association
for Soaps, Detergents and Maintenance
Products (AISE) we are currently helping to
develop the AISE Charter for Sustainability.
G OV E R N A N CE F I N A N C I A L S TAT E M E N T S
C A S E S T U DY
RECKITT GLOBAL
HYGIENE
INSTITUTE
In July, we established the Reckitt
Global Hygiene Institute (RGHI), a
new, fully independent, not-for-
profit global initiative to develop
insights and scientific analysis
that can inform public health
initiatives. Our £18m funding aims to
strengthen the scientific evidence
demonstrating hygiene’s importance
as a foundation for health. RGHI will
act as a research and innovation
hub bridging epidemiology, public
health, and behavioural insights to
generate practical, high-quality
scientific research that leads to
enduring behaviour change.
The Institute aims to advance
understanding of the links between
hygiene and health, encourage
behaviour change and higher global
hygiene standards, and promote
best-in-class hygiene science
internationally.
RGHI has assembled an expert
panel of internationally renowned
academics, which will drive and
direct its research activities. Its
early priorities include advocacy,
establishing a new RGHI fellowship
programme and publishing
cutting-edge research.
Reckitt Annual Report and Accounts 2020 47
 O U R CO M M U N IT I E S

48 Reckitt Annual Report and Accounts 2020

 S T R AT E G I C R E P O R T
INVESTING IN
COMMUNITIES
We want to make access to
the highest quality hygiene,
health and nutrition a right
not a privilege. We are
investing to improve that
access in communities with
unmet needs where we can
have the most impact and
through our brands, making
high-quality products
available to more people.
We empower people –
with products, education
and skills – to make small
changes in their daily lives
that can unlock progress
that lasts a lifetime.
G OV E R N A N CE
How we engage
Reckitt seeks to play a full and constructive
role in society. Our purpose and fight express
what that means for us and guide how we
make a difference. We believe that everyone
has the right to high-quality hygiene, wellness
and nourishment. And we fight on multiple
fronts to make that happen.
Our social impact investment programme
focuses on projects where we can make
a measurable, sustainable and meaningful
difference. It is centred on three main areas
of activity. Sexual health and rights and
maternal and child health are two; the third
area, which was critically important this year,
is clean water, hygiene and sanitation.
Fight for Access Fund
The launch in March of our Fight for
Access Fund marked a new phase in our
drive to translate our purpose – protecting,
healing and nurturing in the relentless
pursuit of a cleaner, healthier world – into
transformative action for communities.
Reckitt Annual Report and Accounts 2020
F I N A N C I A L S TAT E M E N T S
The Fight for Access Fund is a rallying point for
the energy and resources we spend serving
our communities. It’s there to support projects
that improve access to health, hygiene and
nutrition for all. We’ve committed to allocating
the equivalent of 1% of our annual adjusted
operating profit every year to ensure we
continue to broaden and deepen that access.
We put this money to work through our brands
on programmes that have a lasting, positive
impact on people’s lives. The Fund invests to
improve access in a range of ways: by donating
funds to organisations on the ground, by
ensuring high-quality products are produced
and enhancing their availability, and by
educating and informing people.
Combatting COVID-19
In 2020, the collective battle against the spread
of COVID-19 was the immediate and urgent
priority. We mobilised £32m from the Fight for
Access Fund and supplemented this with
additional resources from savings during the
year, which boosted our COVID-19 related
funding to £52m.
49
 O U R CO M M U N IT I E S CO N T I N U ED
C A S E S T U DY
DISINFECT
TO PROTECT
In Asia, Lysol and the Philippine Red Cross
(PRC) joined forces to launch Disinfect to
Protect. This aims to break the chain of
coronavirus infection by improving hygiene
barriers and early diagnosis. Lysol Philippines
contributed P36 million (c.£560,000) to boost
mass testing. Half of this donation was used to
build the Philippine Red Cross Molecular
Laboratory, a mass-testing facility. The other
half went to towards a COVID-19 Samaritan
fund that prioritises testing for around 4,500
of the most vulnerable Filipinos, including
pregnant women, the elderly and those with
pre-existing conditions. Lysol supplemented
this financial support with support in kind. It
has equipped the PRC’s sample collection
facilities and testing laboratories with Lysol
products to help keep frontline health
workers safe.
We prioritised activities that addressed
the stress faced by our consumers and in
communities where we operate, to help stop
the spread of the virus and break the chain of
infection. The Fight for Access Fund supported
governments and frontline health workers
in 66 countries. The £1 million allocated for
NHS workers in the UK was one of 20 major
projects targeted globally. And there was
strong backing too from our brands. Lysol,
for instance, provided $2 million in matched
funding to the US Centers for Disease
Control and Prevention (CDC) Foundation.
Dettol committed £6 million to frontline
health workers and provided urgently needed
medical equipment in Wuhan, China. It also
gave 10 million units of Dettol soap to
vulnerable communities.
Dettol UK pledged to distribute 150,000
care packages to help frontline health
workers and their families stay clean and
safe. And it donated pre-purchased media
time to the UK Government to help amplify
its public health messaging campaign.
Globally, we donated over 27 million
products, including 1 million litres of Lizol
and Harpic disinfectant for Indian hospitals.
And we provided essential PPE for frontline
workers, including over 15 million face
masks worldwide. We also supported
public health messaging through our brand
campaigns and by donating media space.
These are just a few of the many direct
initiatives we undertook in 2020 to counter
the spread of COVID-19. We have also been
50
combatting the virus with projects that
promote clean water, hygiene and sanitation.
Clean water, hygiene and sanitation
We have collaborated on public service
campaigns with government agencies,
NGOs, national medical associations and other
stakeholders and provide funding, products
and educational resources to promote
handwashing and sanitation in Africa, Asia
and the Middle East. We use the strength of
our brands to stress the importance of good
hygiene. Dettol India’s #HandWashChallenge
campaign was particularly successful
at spreading a vital public health
message to a younger demographic. It
attracted billions of views on TikTok.
The Banega Swasth India (BSI) campaign
has been stressing the importance of
hygiene as a foundation for health since
2014. It has helped to instil behaviour
change in 13m schoolchildren over the
years, reducing diarrhoea and improving
school attendance. The spread of COVID-19
through the country added urgency to the
campaign. BSI launched its Healthily app
and donated Return to School kits, including
masks, sanitiser and public health posters, to
over a million schools across the country.
For Mission Paani, Harpic teamed up with
India’s News 18 to highlight the country’s water
crisis. Their nationwide publicity campaign
emphasised the importance of conserving
water and ensuring sustainable sources for
future generations. It also set up community
pilot programmes to construct and renovate
water harvesting structures in selected villages.
In 2020, the programme partners
recalibrated their message in response to
the COVID-19 pandemic. They launched the
Swachhta aur Paani campaign in October.
This stresses the critical importance of clean
water for good hygiene and the urgency of
maintaining hygienic and sustainable supplies.
In Kenya, where we have been at the
forefront of handwashing campaigns for
many years, the biggest obstacle has always
been the lack of safe, clean sources of
water. In 2020, we joined forces with water.
org, donating KSh69m (c.£460,000) from our
Fight for Access Fund. This funding will help
water.org reach around 68,000 Kenyans living
in poverty over the next two years, getting
them access to safer water and sanitation.
In the US, Lysol is investing more than $20
million over the next three years to expand
its HERE for Healthy Schools Program. It
aims to reach the 15 million children in every
Title 1 school in the country by 2022. The
58,000 Title 1 schools across the US are those
deemed to have large concentrations of low-
income students. The programme provides
educational resources that will support the
reopening of schools and encourage children
to learn healthy habits to protect against
the spread of germs in the classroom.
Reckitt Annual Report and Accounts 2020
Sexual health and rights
We have a longstanding commitment to
combat HIV and AIDS. We’ve joined forces
with the United Nations Programme on HIV/
AIDS (UNAIDS) to help protect people with HIV/
AIDS during the pandemic. We’re using the
UNAIDS network to distribute hygiene packs to
around 220,000 people living with HIV across
Africa. The packs contain a three-month
supply of Dettol soap and JIK bleach.
This latest initiative is in addition to
our current Durex partnership with (RED)
in South Africa, which is helping to keep
40,000 girls in school. Keeping Girls in School,
match-funded by the Bill and Melinda Gates
Foundation, is a $10 million commitment
that aims to reduce new HIV infections in
young women, reduce teenage pregnancies,
improve access to sexual reproductive
health services and encourage adolescent
girls and young women to stay in school.
Maternal and child health
In 2020, we announced a partnership with the
United Nations Population Fund (UNFPA), this
provides access and support to expectant
mothers during the pandemic, in Mexico,
Philippines and Thailand.
We also helped expectant mothers in China,
our Embrace Life initiative provides access
to expectant mothers during Lockdown.
With the China Children and Teenagers’ Fund
(CCTF), Chunyu Doctor, and NCP volunteer,
we supported vulnerable expectant mothers
in Wuhan and the Hubei Province. Their
needs would otherwise have not been
met during the pandemic, and the initiative
helped them have a safe and healthy birth.
With CCTF, we also continued our ‘Better
Start in Life’ programme. This is helping 10,000
pregnant women and babies, and reduces
stunting by 40% in rural China. Nutrition
interventions and education aim to prevent
stunting, and help break an intergenerational
cycle of malnutrition in China.
In India, the Nutrition India Programme
(NIP) aims to reach 177,000 mothers of
undernourished children across 1,000
villages to improve nutritional status
during the first 1,000 days of life. In the
five-year program, our goal is to reduce
stunting in children under five by 40%.
Give time
Our Give Time programme offers colleagues
around the world two paid volunteer days to
work within their respective communities. In
2020, Reckitt employees provided 23,147 hours
of support to good causes globally, with
colleagues donating time, skills and expertise
to add real value in their local communities.
The pandemic made volunteering much
more difficult this year, but many colleagues
found ways to give time virtually. Some
connected with elderly and vulnerable people
via telephone befriending services. Others sent
letters to key workers, carers and healthcare
 S T R AT E G I C R E P O R T
professionals to thank them for the work they
have been doing for their communities.
Reckitt’s globally-led Give Time initiatives
provide opportunities for colleagues to use
their skills and experience to volunteer on
a longer-term basis. Reckitt’s long-term
volunteer programme offers colleagues
the opportunity to take part in a 13-week
programme. At the start of 2020, four
Reckitt employees managed teams of young
volunteers in rural community projects in
Nepal, Tanzania and Costa Rica. Through
these programmes, Reckitt and Raleigh
International bring young leaders and local
communities together to work hand in
hand to build lasting, positive impact.
Formed by One Young World, Lead 2030
is the world’s biggest prize fund for young
leaders that make an impact on the UN’s
Sustainable Development Goals (SDGs). Reckitt
C A S E S T U DY
ACCESS TO EDUCATION IN
UNDERSERVED COMMUNITIES
In June, Lysol announced a strategic
partnership with UNCF (United Negro
College Fund) to provide 100 scholarships
for students pursuing studies in public
health, nutrition and other STEM related
fields, with the goal of supporting each
recipient through their time at college
over four years.
The Reckitt Scholars programme will
expand Lysol’s current commitment in the
area of public education and efforts to
improve access to health, hygiene and
nutrition in the US, particularly in
underserved communities and those
disproportionately impacted by the
COVID-19 pandemic.
UNCF is the nation’s largest private
scholarship provider for students of colour,
and awarding more than $100 million in
scholarships to students attending more
than 1,100 schools across the US, including
37 historically black colleges and
universities (HBCUs).
G OV E R N A N CE F I N A N C I A L S TAT E M E N T S
volunteers provided online mentorship to the highest quality hygiene, wellness and
young people seeking Lead 2030 funding for nourishment a right and not a privilege.
their social enterprises. Our mentors shared For the smallholder farmers that provide
practical and business knowledge to help them us with natural raw materials, this translates
develop marketing strategies, e-commerce into programmes that help improve
platforms and other key resources. productivity or recognise sustainably sourced
suppliers with premium payments.
Fairness across the value chain
For larger suppliers, capacity-building
Communities are at the heart of our value
programmes on both human rights and
chains. We see it as our responsibility to
environmental performance protect and
support people who live and work in them,
support the local communities where
whether or not they are directly employed
they operate. We work alongside peer
by us. Accordingly, supporting human rights
companies through the AIM-Progress
across our value chain is an important
forum to promote responsible sourcing
part of our community engagement. We
and strengthen delivery on human rights
want to ensure reasonable livelihoods
and working conditions. We are using the
and good working conditions. Enabling
software-led initiative Manufacture 2030
decent livelihoods strengthens health and
to help our factories and other suppliers
wellness in their communities, which helps
improve their environmental performance.
us deliver our fight to make access to
“We were compelled to take action after
observing the disproportionate impact of
COVID-19 on underserved communities and
the lack of representation of the black
community in higher education. It is more
important than ever that we use our voice
and influence as a force for good and look
forward to collaborating with UNCF on this
effort,” said Ranjay Radhakrishnan, Chief
Human Resources Officer, Reckitt.
“At a time when social, health and
economic issues are all at the forefront of
our national discourse, we are extremely
grateful for support from donors, like
Reckitt and Lysol,” said Dr. Michael L. Lomax,
UNCF’s president and CEO. “This substantial
gift is much needed and will have a lasting
impact on students. Thank you for being a
stellar example of what it takes to realise
the vision of a nation where all Americans
have equal access to a college education.”
Reckitt Annual Report and Accounts 2020 51
 OUR ENVIRONMENT

BUILDING A
Increasingly, our shared COVID-19
experience is revealing the
connection between a healthy

SUSTAINABLE
planet and healthy people. As a
responsible business we want to
play our part in addressing key social
and environmental issues – our

FUTURE
societal impact. It’s the right thing
to do and it’s good for our business.

52 Reckitt Annual Report and Accounts 2020

 S T R AT E G I C R E P O R T
How we engage
Our new sustainability ambitions mark a
step-change in how we engage with the
wider world. We are not just concerned with
mitigating our negative impacts, we want to
do what we can to make things better.
Our new targets reflect our conviction
that engaging positively with social and
environmental issues underpins long-term
growth and offers business opportunities.
Reducing emissions, waste and water-use can
lower our cost base. Integrating sustainability
into our business model drives innovation
and resilience. Our purpose-led approach is
motivating our people to make change happen,
and engages customers and consumers.
Our purpose relentlessly pursues a cleaner,
healthier world. That extends far beyond
personal hygiene and health, we need
urgent action to build a cleaner, healthier
planet. Our pro-active stance extends
across our supply chain and through all our
operations. We have strengthened our
climate change commitment with a pledge
to deliver for the Paris Agreement by 2030
and an ambition to be carbon neutral by
2040. We share learnings globally across our
supply chain to meet consumers’ evolving
priorities more sustainably and at pace.
In 2020, this included partnering with
energy suppliers to accelerate our commitment
to renewable electricity around the world. We
also partner with raw material suppliers and
others to improve ingredients, make packaging
more sustainable and use better chemistry.
Our sustainable innovation programme
aims to reduce our carbon footprint, packaging
and plastics, waste and water-use, while
maintaining or enhancing product efficacy.
We are reviewing our product range to ensure
we deliver purposeful products that meet
genuine consumer needs and advance circular
economy principles. These principles apply to
the energy we use, our ingredients and the
way we package and deliver our products.
We have adopted a science-based
approach to innovation. Our research
and development effort is built on eight
global science platforms. These trigger
insights and pool expertise to generate
more sustainable, even safer and more
effective new product innovations.
We are also alert to the effect on nature
of our activities and for those communities
living in areas where we work or source our
raw materials. We are working with local
communities to protect the ecosystems
that provide key natural raw materials
for us, while safeguarding their human
rights and dignity, and supporting their
ability to earn sustainable livelihoods.
G OV E R N A N CE
Embedding sustainability into strategy
Our aim is to generate business growth
through the positive impact we have on the
world. Our progress rests on three main pillars:
purpose-led brands, combatting climate
change for a healthier world and enabling a
fairer, more diverse and inclusive society.
Our strategy is all about creating positive
impact. We want to be a regenerative
business that adds value to society and the
environment. We’re combatting climate
change with ambitious plans to reduce our
own carbon footprint. We’re taking steps to
improve the environmental performance of our
products, factories, co-packers and suppliers.
And all of these activities support the planet.
By sourcing raw materials, ingredients
and packaging responsibly we protect
communities and the ecosystems in which they
operate. By respecting colleagues, contractors
and suppliers we are encouraging fairness
across the value chain. By producing safer,
sustainable products, reducing waste, and
maximising recycling and reuse, we enable
and promote circular economic principles.
Combatting climate change
In June 2020, we announced our ambition to
be carbon neutral by 2040, beginning with
accelerating our delivery of the Paris
Agreement by 2030, through science-based
targets. Subsequently, Reckitt was one of the
first three global companies to sign up to The
Climate Pledge, co-founded in 2019 by Amazon
and Global Optimism. Our ambition for carbon
neutrality by 2040 is a full decade ahead of the
world’s goal of 2050.
Over 30 global companies are now
Climate Pledge signatories. By agreeing to
accelerate decarbonisation, we are signalling
the need for a new wave of investments
and innovative, low-carbon products and
services. Collaboration will drive markets
for these and speed up their adoption.
This means reducing carbon emissions
from our sites by 65% and powering our
operations with 100% renewable electricity
by 2030. We are already sourcing renewable
electricity where markets allow, and now
have 100% renewable coverage in our largest
manufacturing bases in the US, Europe, India
alongside a number of other countries. All
the electricity bought for manufacturing our
Hygiene business’s brands is now renewable.
Reckitt Annual Report and Accounts 2020
F I N A N C I A L S TAT E M E N T S
C A S E S T U DY
SAVING TREES
WITH SMARTER
INVOICING
In India, we are saving trees by reducing
paper. Statutory and operational requirements
in India require a paper-based invoice trail for
all transactions. Invoices make up at least 98%
of all the paper consumed by Reckitt India.
The India country team revised layouts to
reduce the average invoice length from nine
to two pages. This will save an estimated 5
million A4 sheets every year, equivalent to 100
tonnes of CO2 in avoided emissions – simple,
but effective.
We are also expanding on-site generation,
using solar technology. We are building on
successful investments in the US, Columbia,
Pakistan, Mexico and India, and creating
new projects in Thailand and elsewhere. In
Pakistan, our Mauripur factory has expanded
its solar energy system by 370kW. The
factory had set itself the objective of having
50% of its energy load generated by solar
energy. This has now been achieved. Its
507kW capacity solar farm is reducing its
GHG emissions by 420 tonnes annually,
equivalent to planting around 70,000 trees.
During 2020, we continued to invest in
energy-efficiency projects. Several sites
implemented initiatives, such as installing
electric chillers and automated pump controls.
These steps have helped to propel us
past our 2020 goal of reducing Greenhouse
Gas (GHG) emissions per consumer
unit by more than 40% since 2012 – we
in fact achieved a 53% reduction.
We have increased energy efficiency by
27% and will continue to improve on that.
While this falls short of our 35% improvement
target, this is in part because other urgent
priorities, notably GHG reduction, took
precedence; we also focused on strengthening
product quality and productivity. We
will, however, target an additional 25%
improvement in energy efficiency from
current levels as part of our drive towards
delivery for the Paris Agreement by 2030.
In parallel, we have been strengthening
our approach to assessing climate change
risk. This began in 2018 with a detailed initial
study of climate-related risks across all
business units. We’ve continued assessing
risks and are progressively mitigating
53
 O U R E N V I RO N M E N T CO NT I N U ED
these in our operations and in our products
through our environmental programme.
Our new environmental agenda is a further
step along this journey. In 2020, we established
a partnership with Judge Business School at
Cambridge University. This will further assess
the risks and opportunities posed by climate
change. This work, which considers both
supply networks and product development
will become a central foundation for our
climate strategy for sustainable growth.
We’re developing a ‘digital twin’ approach
with Judge Business School to model a range
of climate risk and opportunity scenarios across
the business. This is part of a comprehensive
investigation across 2021 to further assess
the detailed risks to global supply chains and
our sites. It will factor in consumer responses
and purchasing patterns related to climate
change. This frames our mitigation and
adaptation responses in supply chains and
product development. For example, in water-
stressed locations it will prioritise site and
catchment activity on water. We will continue
to report on the risks we envisage and our
response to them. A detailed disclosure on
climate-related financial risk, including our
climate-related risks and our activities to
address them is in our Climate change insight.
Promoting the circular economy
Consumers are increasingly aware of their own
environmental responsibilities – a trend driven
in part by more widespread access to data.
There is growing awareness of the importance
of biodiversity and ecosystem protection. The
demand for plastics reduction is growing. And
they expect companies to play their part.
Society is transitioning from one based on
taking, using and disposing of resources to one
that applies systems thinking to reduce, reuse,
recover and recycle them. The companies
that are ready to meet this paradigm shift will
be best positioned for long-term growth.
Packaging and plastics
We are actively reducing our reliance on
plastics and improving the sustainability
of our packaging. By using less material and
increasing its recyclability we are reducing
cost, promoting the circular economy and
addressing consumer, customer and
regulatory concerns.
We continue to progress our work to
reduce our use of virgin plastics. In 2020,
we joined the US Plastics Pact, which
works collectively towards the common
vision of a circular economy for plastics, as
outlined in the Ellen MacArthur Foundation’s
New Plastics Economy initiative.
54
We work with numerous partners to extend
our ability to deliver impact at scale. Under the
Partners to Innovate programme, we are
exploring future plastics opportunities by
expanding PCR inclusion, developing bio-
based resins and investigating chemically
recycled resins. Strategic partnerships, with
companies like Dow, on new materials, and
Veolia, on jointly developed solutions to replace
virgin plastic, will help us achieve these goals.
The Veolia partnership has delivered
several successful projects in Europe. The
injection moulded containers for Finish
Quantum now incorporate 30% recycled
polypropylene (r-PP) content. Vanish Oxi
Powder tubs have 35% recycled polyethylene
(r-PE) content. These programmes are
being rolled out for other products in
Europe and extended to other regions.
We are also working with Veolia on broader
circular economy initiatives to stimulate
waste collection, add value to waste and
influence consumer behaviours to promote
the right sorting and recycling habits.
Our Yoyo project in France was a circular
economy proof-of-concept initiative to
demonstrate cost-effective HDPE recycling.
Recycling high-density polyethylene (HDPE)
is hampered by the lack of demand for the
recycled product. We equipped consumers
with distinctive pink recycling bags for
their HDPE plastic bottles. These were then
returned, via municipal sites, to Veolia facilities
for reprocessing. The resulting r-HDPE
was used as feedstock, providing 25% of
the content in brand new Vanish tubs.
Reducing waste
Our campaign for zero waste across the
business has been highly successful. We met
our zero waste to landfill (ZWTL) target at all
our baseline sites in 2020. Overall, we have also
reduced waste by 28% since 2012, almost
reaching our 30% target. But we can’t and
won’t stop there. We’ll save another 25% as
part of our new targets, and increase recycling.
Our Chonburi nutrition plant in Thailand
met its ZWTL target in 2018, but in 2019,
6% of its waste was still being incinerated.
The factory set out to eliminate all waste
incineration by recycling or reusing all of its
waste. It achieved this by converting more
waste streams to material which could be
used by others. For example, developing a
new supply stream of spent processed milk
and powder for farmers to use as animal feed.
Through these and other measures, Chonburi
became the first of our sites to achieve not just
ZWTL but zero waste to incineration (ZWTI).
Reckitt Annual Report and Accounts 2020
C A S E S T U DY
CIRCULAR
FASHION
Minimising waste goes beyond making our
own production processes more efficient, it is
also about changing consumer behaviour.
Fashion has been cited as one of the world’s
most polluting industries, responsible for 4%
of global emissions. It’s an entire industry that
was built on waste, with the idea that clothes
constantly need to be replaced. But it doesn’t
have to be like that.
Vanish has a different mission. It aims to
promote sustainability and responsible
clothing consumption. And through its new
partnership with the British Fashion Council,
its ideas are now percolating through to the
fashion industry. The brand has become
a founding partner of the Institute of
Positive Fashion (IPF). It has been named
as a research partner on the IPF’s launch
project, The Waste EcoSystem, which aims
to understand what it will take to create
a circular fashion industry in the UK, and
how that can be expanded globally.
Innovating for a cleaner healthier world
We’ve developed a rigorous methodology for
developing safe and sustainable products that
serve a genuine and growing consumer need.
Our global research effort is organised around
science platforms on key topics that span
business areas. Concentrating expertise in
scientific specialisms maximises our ability to
develop differentiated science and related
insights. These provide the basis for new
technologies, materials and formats which can
then be developed into superior, even safer
and more sustainable products.
 S T R AT E G I C R E P O R T
Science platforms
Our eight centres of scientific excellence cover
specialisms that relate to Reckitt areas of
interest. They focus on allergy and immunity,
digestive health, entomology, microbiome
management, nutrition and cognition, polymer
science, sensory enrichment and surface
chemistry. Our approach in each reflects
principles underpinning the fast-emerging
area of green chemistry.
We apply this knowledge in over 20
core technology areas, such as controlled
release or surfactants, to a circular design
process where consumer, sustainability
and business benefits are reinvested in
continuing improvement. This innovation
process aims to improve on current offerings
by developing differentiated products that
are more effective and more sustainable.
Careful management of the ingredients
we select for inclusion in our products
combined with global safeguards form the
cornerstone of our approach to product
stewardship. We collaborate with partners,
suppliers and our customers to find new
solutions that both delight consumers and
improve on our collective chemical and
environmental footprints. Reckitt is proud to
have been recognised for these efforts as a
‘frontrunner in chemical footprinting’ in the
Chemical Footprint Project’s 2020 results.
Sustainable innovation
Our Sustainable Innovation Calculator helps
us compare the sustainability of product
innovations with existing benchmarks. We
evaluate a product’s ingredients, raw materials,
packaging and its consumer impacts to assess
whether new products are more sustainable.
The tool is continually evolving as sustainability
knowledge improves. In 2020, we put more
focus on ingredients and packaging, alongside
carbon and water footprints. We improved its
integration into all three global businesses. This
helped us deliver 30% of our net revenue from
more sustainable products.
We know we need to improve the
carbon and water impact of our brands.
Since 2012, we have delivered 18% carbon
reduction and 13% water reduction. This has
improved in the last 2 years but needs to
accelerate further. Until now, we have largely
focused on our manufacturing operations to
reduce emissions. Our new goals go further,
reducing product carbon and water footprints
alongside reducing plastic and helping
consumers recycle after using our brands.
Managing water
Managing water resources effectively is
essential for the health of our planet. Millions
of people are affected by water scarcity and
with climate change the number will rise.
Our biggest challenge is not within our
own operations, it’s that consumers need
water to use many of our products. We are
G OV E R N A N CE
campaigning to help consumers recognise
looming water crises and take steps to
address them by using our products more
efficiently. We also work with communities in
water-stressed areas to give people better
access to clean water and sanitation.
The Finish no rinse campaign, which
urges consumers to abandon pre-rinsing to
save over 50 litres per wash on average, is
highlighting the need to conserve in water-
stressed regions. Following a successful launch
in Turkey, it has continued internationally, with
major campaigns in Australia and the US.
Globally, thousands of people have pledged
to save million of gallons of water annually.
In the long term we aim to be water
positive in water-stressed locations within
the Group and to sustain water resources
in our supply chain. Reckitt is pursuing
initiatives that increase water efficiency
in all our operations and deliver savings
across the value chain. We have surpassed
our target of improving water efficiency
by 35% by 2020, achieving 39% overall, but
we know that to support water resources
everywhere, our work cannot stop there.
Many of our factories, especially in water-
stressed regions, introduced water-saving
and recycling measures. Our Hosur site in
India worked with local government agencies
and communities to assess hydrology, future
supply risks and planned production needs.
It then agreed a plan to reduce water use,
improve efficiency and enhance access and
water retention in its catchment area. It built
new dams, excavated ponds and de-silted
drainage canals. In Indonesia, the Cileungsi
factory built a new reverse osmosis system,
upgraded steam traps and reduced its water
use by 30%. And on a smaller scale, our
Agbara factory in Nigeria has introduced a
system for siphoning off ion-rich water from
its borehole that it can’t use in production, to
provide grey water for cleaning purposes.
Protecting ecosystems
We rarely buy natural materials in their raw
state, but as the ultimate user of natural refined
materials we are as responsible for their
sustainability impacts as our suppliers.
In 2020, we joined the CGF Forest Positive
Coalition as one of 19 members committed
to ending deforestation. With a collective
market value of over $1.8 trillion, the coalition
has the scale and resources to accelerate
systemic efforts to protect ecosystems and
move towards a forest positive future.
Sourcing responsibly is in our own interests.
We make future supplies more resilient by
respecting the communities that produce our
raw materials and the ecosystems in which
they live and work. We work with partners on
the ground to combat biodiversity loss while
supporting labour rights and human dignity.
Reckitt Annual Report and Accounts 2020
F I N A N C I A L S TAT E M E N T S
Currently, much of the seven million hectares
of forest land lost annually is converted to
palm oil production. More than 40% of palm
plantation land is farmed by smallholders. They
face intense competition and in many cases
cannot afford to farm sustainably. We monitor
deforestation through supplier programmes
and the Starling satellite mapping approach
we operate with our peers, but to reduce
this consistently we also need to change
the economics of land clearance for farmers.
Our programme with the Earthworm
Foundation improves livelihoods for small
farmers. It supports certification and assists
them with intercropping projects to make
their land more productive and sustainable.
Alleviating the pressure on them to clear
new land helps to prevent deforestation.
In 2019, we commissioned the Danish
Institute for Human Rights to a conduct
country-level human rights impact assessment
(HRIA) of our Durex and Enfa value chains in
Thailand. Following its report in 2020, and to
reduce the risk of deforestation in rubber
farming, we have introduced our Fair Rubber
commitment. This provides latex farmers in
Thailand with a price premium that supports
their livelihoods while also strengthening
the supply of latex we depend upon and
reinforcing sustainable farming principles. The
programme is similarly investing in communities
working on rubber plantations in Malaysia
to support their long-term sustainability.
C A S E S T U DY
POLLEN
COUNT
Understanding the importance of biodiversity
requires more than abstract, intellectual
engagement. Although a relatively small
project on its own, the Nowy Dwor employee-
led bee-keeping project has the potential to
open minds to the importance of biodiversity.
The Nowy Dwor site joined a national
project to promote biodiversity led by
Polish NGO, Liga Ochrony Przyrody (LOP).
Reckitt is hosting four beehives and Reckitt
employees are being taught how to care
for bees. Honey is collected and packed
for us. The honey is also laboratory tested
and is helping conservation organisations
to monitor the state of the environment.
55
 N O N - F I N A N C I A L I N F O R M AT I O N S TAT E M E N T

The information below is intended to help our stakeholders understand our position on key non-financial matters, following the new non‑financial
reporting requirements contained in sections 414C(7), 414CA and 414CB of the Companies Act 2006.

Policies and standards

Reporting requirements which govern our approach Additional information and risk management

Environmental matters • Environmental policy Group Environmental Management System1

• Responsible sourcing of How Purpose drives our performance Pages 12-15
natural raw materials Our Sustainability Performance Pages 24-27
policy Environment Pages 52-55
• Plastics Pledge Task Force on Climate-related Financial Disclosures (TCFD)2
Employees • Code of Conduct How Purpose drives our performance Pages 12-15
• Our Values Our Sustainability Performance Pages 24-27
• Occupational Health & People Pages 40-43
Safety CRSEC Committee Report Pages 128-133
• Speak Up policy Gender Pay Gap Report
• Policy on Human Rights Group Occupational Health & Safety Management System1
and Responsible Business
Human rights • Policy on Human Rights How Purpose drives our performance. Pages 12-15
and Responsible Business Our Sustainability Performance Pages 24-27
• Modern Slavery Act Partners Pages 45-47
Statement Environment Pages 52-55
• Commitments to
international standards
Social and community • Breast-Milk Substitute Our commitment to auditing and transparency on BMS
matters (BMS) Marketing Policy How Purpose drives our performance Pages 12-15
• Product Safety Policy Our Sustainability Performance Pages 24-27
Communities Pages 49-51
Social Impact Investment Report
Anti-bribery and • Code of Conduct People Pages 41-43
anti-corruption • Speak Up policy CRSEC Committee Report Pages 128-133

Policy embedding, due Risk Management and Principal Risks Pages 80-92
diligence and outcomes CRSEC Committee Report Pages 128-133

Principal risks and impact of Principal Risks Pages 82-92

business activity
Description of business model Our Business Model Pages 10-11
Non-financial key Pages 26-27
performance indicators

1. Information not in the public domain

2. TCFD disclosure can be found in our Climate change insight

Most of our reporting on these topics and KPIs are contained in our Strategic Report under the sections entitled How purpose drives our performance, Our Sustainability Performance,
Consumers, Customers, Employees, Partners, Communities, Environment, and Risk Management (or are incorporated into the Strategic Report by reference for these purposes from the
pages noted). Reckitt has formulated appropriate policies and due diligence procedures regarding all the non-financial information presented in this Annual Report. We make it our
responsibility to follow legislation and policy diligently. Insights into key policies and due diligence procedures, and the basis and methodological principles for the collation of our key
sustainability metrics, can be found online at https://www.reckitt.com/sustainability/policies-and-reports/.

Gender diversity1
Definition: the percentage of women in our global workforce.
Target: expand our focus on diversity and talent by improving the retention rates of women from managers to senior managers. This is in line with
our goal of doubling the number of women in senior management roles from a 2016 baseline.

Board Directors Senior managers Other employees2

7 (2019: 7) male 448 (2019: 417) male 21,611 (2019: 20,472) male
5 (2019: 4) female 182 (2019: 148) female 17,300 (2019: 16,708) female

1. Diversity data is taken as of 31 December 2020 for active Reckitt employees (excluding contractors)
2. 34 persons with undisclosed gender

56 Reckitt Annual Report and Accounts 2020

 S T R AT E G I C R E P O R T G OV E R N A N CE F I N A N C I A L S TAT E M E N T S

Greenhouse Gas (GHG) emissions and energy consumption

Metric Unit 2020 2019

Total Scope 1 GHG emissions tCO2e 138,105 140,117

Total Scope 2 GHG emissions tCO2e 123,709 201,902
Total Scope 1 and Scope 2 GHG emissions tCO2e 261,814 342,019
Emissions intensity 1
tCO2e per unit of production 0.0291 0.0424
Energy consumption resulting in above GHG emissions kWh 1,341,712,724
Proportion of GHG emissions arising from UK operations % 9
Proportion of energy consumption arising from UK operations % 12

We reported the above emissions on a market-based approach in line with the WRI/WBSCD Greenhouse Gas Protocol, Scope 2 Guidance and our
Reporting Criteria. Following a location-based approach, our Scope 2 emissions for 2020 were 256,993 tonnes of CO2e (2019: 273,688) and our total
Scope 1 and 2 tonnes of CO2e were 395,098 (2019: 413,805).
Our GHG and energy data includes emissions and energy consumption from operations covered by the Group Financial Statements for which we
have operational control. Where we acquire new businesses, we include their emissions and energy consumption from the first full calendar year of
our ownership onwards.2 CO2e, or carbon dioxide equivalent, is the effective amount of CO2 generated by all gas emissions which add to the
greenhouse effect and global warming.

1. The scope of our GHG emissions per unit of production KPI is for manufacturing and warehousing. Including R&D and offices the GHG emissions intensity per unit of production in
2020 and 2019 would be 0.0319 tCO2e and 0.0447 respectively
2. For further information on the methodologies used to calculate our emissions and energy metrics please see our Reporting Criteria Basis of Preparation

Our policies
Anti-bribery and corruption
Our policy is that all Reckitt companies, employees and contractors must comply with the anti-bribery, anti-corruption and competition laws of all
countries in which they operate. Directors and managers must ensure that the employees and contractors they supervise are aware of and comply
with this policy. All employees and contractors must certify annually that they have complied with our Code of Conduct and the Audit Committee
reviews internal audit findings in relation to this.

Employee policies
Reckitt’s Code of Conduct governs standards of conduct in relation to our employees, as well as our stakeholders. In addition, Reckitt has policies
committing to equal opportunities at work and to providing a safe and healthy working environment. Health and safety performance is monitored
through our Group Occupational Health and Safety Management system, enabling us to investigate any incidents and take any necessary action. We
have a Speak Up policy and process, allowing any employee or third party to confidentially report a violation of the Code of Conduct, local law or
regulation, or unethical behaviour.

Human rights
Our Human Rights and Responsible Business Policy is based on the International Bill of Human Rights and the International Labour Organisation’s (ILO)
Declaration on Fundamental Principles and Rights at Work. We also follow the UN Guiding Principles on Business and Human Rights and Organisation
for Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises.

Product safety policy

The purpose of this policy is to assure our stakeholders of the safety of our products by describing our approach to Safety Assurance for products of
Reckitt. We have a responsibility to develop products that are as safe and nourishing as they can be; to monitor their in-use safety and listen to
feedback from users, and if things change, to react quickly and effectively to mitigate harm.

Responsible sourcing policy

This commits us to ensuring that natural raw materials in our products are produced in a manner that meets or goes beyond applicable laws and
regulations, respects human rights, safeguards health and safety, protects the environment and generally supports sustainable development.

Environmental policy
This sets out our objectives for reducing our environmental impacts. It requires us to comply with relevant legislation, consider environmental issues
in key decisions, and engage with multiple stakeholders for better environmental performance.

See more: https://www.reckitt.com/sustainability/policies-and-reports/

Reckitt Annual Report and Accounts 2020 57


This statement, which
forms part of the Strategic
Report, is intended to show
how Reckitt’s Directors
have approached and
met their responsibilities
under section 172 of
the Companies Act
2006 during 2020. The
statement has been
prepared in response to the
obligations set out in the
Companies (Miscellaneous
Reporting) Regulations
2018, and the UK Corporate
Governance Code 2018.
As required by section 172 of the Companies
Act 2006, a Director of a company must act in a
way s/he considers, in good faith, would most
likely promote the success of the company for
the benefit of its shareholders. In doing this,
the Director must have regard, amongst other
matters, to the:
• likely consequences of any decisions in the
long-term;
• interests of the company’s employees;
• need to foster the company’s business
relationships with suppliers, customers and
others;
• impact of the company’s operations on the
community and environment;
• company’s reputation for high standards of
business conduct; and
• need to act fairly as between members of
the company.
As a Board our aim is always to uphold the
highest standards of governance and business
conduct, taking decisions in the interests of the
long-term sustainable success of the company,
generating value for our shareholders and
contributing to wider society. We recognise
that our business can only grow and prosper
over the long term by understanding the views
and needs of our stakeholders. Engaging with
stakeholders is key to ensuring the Board has
informed discussions and factors stakeholder
interests into decision-making.
58
S 1 7 2 S TAT E M E N T
Considering stakeholder interests
The Board is responsible for promoting
the long-term sustainable success of the
company, generating value for shareholders
and contributing to wider society. The Board
aims to ensure effective engagement with,
and participation from its shareholders and
stakeholders. The Board commissioned
independent research in 2019 to identify
stakeholder views and expectations of
Reckitt. The findings were incorporated
into, and continue to form part of, the
Board’s decision-making processes. This
includes the use of meeting paper templates
which set out stakeholder considerations,
providing the Board with assurance that
potential impacts on stakeholders are being
carefully considered by management when
developing plans for Board approval.
The Board is also responsible for assessing
and monitoring the company’s culture
and for ensuring its alignment with the
company’s purpose, values and strategy.
The Board’s normal meeting schedule
includes meetings with local functional
teams and members of the workforce
and visits to different operational areas of
the business, including offices, sites and
factories. The September Board meetings
are normally held off-site, to enable the
Board to engage with different areas of
the business. In 2020, the normal meeting
schedule was impacted by the COVID-19
pandemic and the consequent inability to
have face to face meetings. However, even
with meetings needing to happen virtually,
workforce engagement took place virtually.
The Designated Non-Executive Director
for engagement with the company’s
workforce, Mary Harris, engages with the
Group’s workforce throughout the year and
provides updates to the Board on workforce
engagement activities. The Board receives
meeting papers which provide updates on
employee culture and the results of internal
employee surveys. The Board also reviewed
internal video broadcasts including from the
‘Stronger Together’ series, in which employees
spoke directly about their experience.
Reckitt Annual Report and Accounts 2020
How the board engaged with its
stakeholders during the year
Interests of our employees
The Board recognises the benefits of personal
interaction and informal discussions in
learning more about day-to-day operations,
the development and execution of strategy,
and gathering direct insights into culture
from workforce engagement. The Board
had regular reviews of talent, employee
engagement and culture. There were direct
interactions at Board meetings with key
people in the business on a variety of topics.
As part of the September 2020 Board
meeting schedule, Board Directors and the
General Counsel & Company Secretary worked
together to hold virtual roundtable sessions
with small groups of Reckitt employees.
Employees shared their thoughts on working
at the company, its culture, purpose and
mission, and their ideas about what could be
improved. Following these meetings, each
pairing provided feedback to Mary Harris,
who in turn fed this back to the Board. The
Chairman and other Board members were
also actively involved in meeting top talent
and future leaders during the year. These
insights were invaluable in helping the Board
understand employees’ interests and factor
them into its discussions and decision-making.
Amidst the ongoing COVID-19 pandemic,
ensuring continued wellbeing for employees,
both physical and mental, has been a high
priority for the Board and senior management.
Safe social distancing was preserved for
all office-based employees as in most
countries they worked from home throughout
the pandemic. Maintaining safe working
environments in our operational sites was also
key and we established COVID-19 working
practices including temperature checks and
the provision of PPE. We updated our people
policies and practices, encouraged virtual
learning and leadership support through
our Reckitt learning platform. We also ran
virtual social events such as cook-alongs,
quizzes and fitness classes and challenges.
Management maintained visibility by
way of regular virtual townhalls and by
direct engagement through broadcasted
sofa conversations with senior leaders. We
have conducted regular employee surveys
as one way to measure our success and to
help us adapt our approach to supporting
our workforce. These showed employees
overall were happy with our internal
response to the pandemic. Willingness to
recommend Reckitt as a place to work was
higher than ever before during this time.
 S T R AT E G I C R E P O R T
Our compass is key to our distinct culture and
is also encapsulated in Freedom to Succeed,
our employee value proposition, which rolled
out during 2019. Freedom to Succeed
represents the environment at Reckitt, where
colleagues are empowered to share ideas,
generate solutions, and contribute to the
successful running of the company. In 2020, we
also launched the Sir James Reckitt Award as a
way to acknowledge outstanding teams who
truly go above and beyond. This highly coveted
award celebrates exceptional teams doing
exceptional work in service of our purpose,
fight, and compass. The worthy recipients for
the inaugural award were the team in the
factory near Wuhan, China for their
commitment to manufacturing essential
disinfectant through the early stages of the
COVID-19 pandemic in China.
In the realm of diversity, inclusion and
belonging, our culture was further enhanced
in early 2020, with the launch of the ‘Stronger
Together’ conversation series. These sessions
focus on employee storytelling, enabling
greater understanding across the organisation
of race, gender and LGBTQ+ inclusion. Board
members have attended the sessions this
year, hearing first-hand the lived experiences
of colleagues. We use this awareness to
foster a more inclusive environment – to be
‘stronger together’. There is an initial five-year
commitment to the series, with a review of
the frequency and effectiveness after the first
12 months. These sessions will continue to be
about listening and learning, covering a broad
range of inclusion and diversity topics. There
is also a commitment, three times a year, to
invite external voices to join these sessions,
giving Laxman and the senior management
team the chance to ask questions and to
hear from customers, suppliers, partners and
thought leaders about these important topics.
All employees are encouraged to make their
voices heard. Our Purpose Council, comprised
mainly of younger employees, identifies and
adds momentum to social and environmental
initiatives. Senior managers have mentors
who are earlier in their career and in more
junior roles. These mentors are empowered to
provide input and share the wisdom of younger
generations. Our Speak Up whistleblowing
policy provides safe communication channels
for those wishing to raise concerns. More
information on our engagement activities
can be found on pages 41 to 43.
The Board has undertaken a thorough
exercise to understand the composition of the
Reckitt workforce, and while we are primarily
focused on permanent employees, we remain
alert to any issues with employees of our
subcontractors and ensure our procurement
contracts have the highest possible
requirements regarding working conditions.
G OV E R N A N CE F I N A N C I A L S TAT E M E N T S
CONNECTING
During 2020, direct Board engagement with
colleagues has been invaluable in helping to
WITH PEOPLE
ensure that, in an extremely challenging
year, we put colleague safety and wellbeing
first, while ensuring we fulfil our purpose
WITH PURPOSE
for our consumers, customers and the
communities in which we operate.
My meetings and conversations with
colleagues during the year have reinforced
my sense of the company’s culture of
ambition and commitment, with a clear
purpose at its core. The opportunity to
make a positive difference is a major
motivating factor for the people here. It
validates the Board’s decision in February
2020 to endorse our purpose-led strategy.
The new purpose, fight and compass
continue to inspire and unite colleagues.
In the unfamiliar and testing conditions
imposed by COVID-19, feedback from
surveys and direct conversations
suggested even greater shared
determination to deliver our purpose,
despite an inevitably intensified
workload. Management’s response
to that, a gift of two additional
I will continue to holiday days for all employees, was
engage actively with warmly endorsed by the Board.
employees in 2021 The Board has monitored the impact of
alongside my fellow COVID-19 on colleagues closely, including
understanding the initiatives taken to
Directors to ensure the support physical safety, as well as their
Board’s decision- broader wellbeing and mental health. I saw
this for myself in the future workplace
making is enriched by initiative, which solicited feedback on
employee experience. My participation in
their insights and the ‘Stronger Together’ conversation series
reflects their deepened my appreciation of colleagues’
concerns on Black Lives Matter and broader
experience. diversity and inclusion themes. Feedback
from these sessions influenced the new
Mary Harris
Diversity and Inclusion strategy endorsed
Designated Non-Executive Director
by the Board in 2020.
for engagement with the
company’s workforce
The Board is monitoring the strategic
and cultural transformation at Reckitt
through periodic surveys and direct
interactions with colleagues. Regular
employee engagement allows rapid
follow-up where issues occur, and
informs resourcing requirements
and investment in new capabilities,
as evidenced in 2020 by the Board’s
agreement to launch an entirely new
business line, Global Business Solutions.
Reckitt Annual Report and Accounts 2020 59

The employee voice was further enhanced
through the appointment in 2019 of Mary
Harris as the Designated Non-Executive
Director for engagement with the company’s
workforce. As part of her role, Mary has the
same access to internal communications
materials, channels and events that Reckitt
employees do. During the year, Mary has
been involved in key conversations with
the workforce, relaying this information in
Board discussion where appropriate.
Shareholders
The Board also continued engagement
with investors. Several Non-Executive
Board members participated in one-on-
one investor meetings, in addition to the
normal meetings between executive
management and investors and analysts.
Our Chairman, CEO and CFO had extensive
interactions with many of our key shareholders,
particularly upon the announcement of our
new strategy. The restrictions imposed
by COVID-19 limited our ability to meet in
person. However, we were able to participate
in a number of virtual meetings. Our CEO
participated in numerous conferences, many
of them hosted by banks, in forums and
fireside chats with international investors.
The Chair of our Remuneration Committee
has continued to have a close dialogue
with shareholders in respect of executive
remuneration, and we are pleased to note the
continued support for our approach to the
Remuneration which shareholders approved in
2019. The Chairs of both our Audit and CRSEC
Committees also participated in one-on-
one investor meetings on an ad-hoc basis.
We welcomed the opportunity for
individual shareholders to submit questions
ahead of our AGM in 2020, which was held as
a closed meeting with a virtual webcast due
to the COVID-19 pandemic. Board members
listen and respond to shareholder views
and feed back to the business as necessary.
More information on our engagement
activities can be found on pages 37 to 39.
Fostering relationships with our customers,
partners and suppliers
Our CEO engaged with several key customers,
partners, and suppliers to maintain and
build on our existing relationships and
ensure that key stakeholder concerns are
understood and reported back to the Board.
We engaged with our customers to
improve supply provision and communications.
Increased international demand, particularly for
hygiene products, combined with the global
supply chain disruptions caused by COVID-19,
required continuing close engagement
with our suppliers and logistics partners.
60
S 1 7 2 S TAT E M E N T C O N T I N U E D
Output was increased by focusing on full
pallets, shipped direct from factory to
customers and we prioritised essential
products across our customers. Service
was a constant element of our supplier
engagement agenda, which helped maintain
supply, when for many products such as Lysol
and Dettol, demand increased hugely during
the pandemic. Collaboration with suppliers
in every market helped ensure continuity of
supply of ingredients and packaging, while
also enabling us to qualify new suppliers
and co-packers to help meet demand.
Reckitt’s ‘Partners to Innovate’
programme with suppliers not only enabled
this unprecedented increase but also
supported our innovation pipeline with,
for example, access to new packaging
materials that meet growing consumer
demand for recycled plastics and our own
sustainability ambitions. A virtual meeting
with key suppliers in December, involving
our CEO and Chief Supply Officer, further
strengthened our supplier relations, while
generating support to deliver our strategy,
standards of customer service, innovation
opportunities and wider ESG agenda.
Our Third Party Code of Conduct, available
on our website, sets out the standards we
expect of any suppliers (and their contractors)
working directly with or on behalf of the Group
to maintain trusted business relationships in
accordance with the Group’s values, culture,
policies, procedures and applicable laws.
From a customer perspective, support for
business partners in delivering their hygiene
standards through the pandemic has been
a strong element during 2020. An entirely
new professional business channel was
developed, based on the trust consumers
have in our brands. Reckitt’s Global Business
Solutions came from a standing start to build
partnerships with Avis Budget Group, Transport
for London, Amtrak, Airbnb, British Airways and
Delta Airlines, amongst others. Reckitt supports
them with the expertise, knowledge, and
products they need to provide their customers
with the highest standards of hygiene and
safety that our brands guarantee. Reckitt
partnered with the Hilton Group, to launch
the ‘Hilton Cleanstay’ programme to deliver
high standards of cleanliness and disinfection
in Hilton properties around the world. In a
first for the hospitality business, Reckitt and
Hilton are collaborating with the Mayo Clinic
to help Hilton guests enjoy an even cleaner
and safer stay from check-in to check-out.
Reckitt Annual Report and Accounts 2020
Reckitt’s reputation with customers and
consumers is strengthened by our scientific
experience and global capabilities. We
continued to develop our scientific credentials
during 2020, and in July launched the ‘Reckitt
Global Hygiene Institute’ with key partners in
medical science, health and education. The aim
of the Institute is to generate high-quality
scientific evidence to inform public health
recommendations and promote behaviours that
improve global hygiene, underpinned by our
belief that access to the highest quality hygiene
is a right not a privilege and that hygiene is the
foundation of health. More information on our
engagement activities can be found on pages
33 to 35 and pages 45 to 47.
Impact on our communities and the
environment
In 2020, the COVID-19 pandemic meant we
had to act with urgency to address the stress
faced by our consumers and communities
where we operate, to stop the spread of the
virus and break the chain of infection. Reckitt’s
Fight for Access Fund was established to
work with partner organisations, help frontline
health workers, promote behavioural change,
and help the communities in which we live
and work. We mobilised over £52m to address
our fight against the spread of COVID-19,
across 66 countries, including donating Reckitt
products to the NHS, partnering with Meals
on Wheels Australia to support and protect
the elderly and partnering with UNAIDS to
help protect people living with HIV across
Africa. More information on the Fight for
Access Fund can be found on our website
at www.reckitt.com/sustainability or in the
Communities section on pages 49 to 51.
Our purpose – to protect, heal and
nurture in the relentless pursuit of a cleaner,
healthier world – puts us at the centre of
the most pressing issue facing the world
today. Our commitment to this purpose is
evidenced by our new sustainability ambitions
for our products and business activities
and the impact we have on society and
the environment as a whole. In developing
these, as outlined in pages 52 to 55 we
have considered the most material issues
facing Reckitt, and are working with peers,
customers, governments, and civil society
to meet shared aims. For example, our
commitment to accelerate delivery on the
Paris Climate Agreement for 2030 and our
ambition for carbon neutrality by 2040 aligns
with Governments globally and many of our
key customers, including Amazon with whom
we are partners in delivering their Climate
Pledge. We have also joined the global
consumer-facing ‘Count Us In’ coalition to
mobilise consumers and indeed our own teams
in measures to combat climate change at an
individual level. With these points in mind,
it was pleasing to secure FTSE4Good Index
accreditation for the 17th consecutive year.
 S T R AT E G I C R E P O R T
The Board will look to continually engage
stakeholders to drive sustainability
performance and deliver positive societal
impact. An immediate example of this was
our Board listening session to investigate
the impact of climate change and especially
water scarcity on our business, value chains
and people living in the communities where
we work. Members of our CRSEC Committee,
joined by our CEO and leading executives,
heard from representatives of international
NGOs, Indian State Government, the investor
community, the UK Government who are
hosting the 2021 global climate conference,
and a key Reckitt customer, Amazon,
which has prioritised climate change in its
work. The session provided an excellent
review of the issues facing business and
communities, and the perspectives of the
different stakeholders on climate change
and water scarcity. It enabled Reckitt to
embrace these perspectives in its work
and supported stronger oversight of the
agenda amongst the CRSEC Committee
members involved. Further sessions are
planned during 2021 on a range of ESG
issues. More information on our engagement
activities can be found on pages 49 to 55.
Stakeholder influence on long-
term strategic decisions
Strategic review
The strategic review which commenced in
2019 continued into 2020. Feedback from
multiple stakeholders, including customers,
shareholders and employees, has informed our
new strategy. The Rejuvenating Sustainable
Growth strategy, including our new purpose,
fight and compass, was approved by the Board
in February 2020.
From early on, the priority was to listen
and to learn. In the months leading up to the
announcement of our new strategy, Laxman
and his team spent time in markets all around
the world and met key customers. They
visited field operations, factories, research and
development centres, and spent time with the
sales teams. Laxman spoke to shareholders,
alumni and many employees, a large portion
of whom are shareholders in Reckitt. The
team analysed our performance and assessed
our capabilities versus our competitors.
G OV E R N A N CE F I N A N C I A L S TAT E M E N T S
The conversations with customers and sales Diversity and Inclusion strategy
teams identified numerous opportunities for Stakeholders play an increasingly important
collaboration based on areas of common role in shaping key decisions. The Board
interest that remained underdeveloped. This incorporates their feedback into its discussions
helped to highlight the importance of investing as a matter of course. It also factors
more in global customer relationships. An stakeholders’ views into its decision-making
entrepreneurial, can-do spirit and a sense of process. For example, before endorsing the
personal commitment to their work emerged company’s Diversity and Inclusion strategy in
as common attributes among Reckitt June 2020, the Board listened to employee and
employees. And even before the COVID-19 external stakeholder voices in the ‘Stronger
pandemic, many stakeholders, including Together’ conversation series and via other
employees and institutional investors, forums. Their views and stories had a profound
expressed the view that Reckitt should focus influence on the final approved strategy.
on long-term growth and that this was best
achieved by strengthening its social and 2021 Financial Plan
environmental commitments. In November 2020, the Board approved
These discussions helped Laxman and his team Reckitt’s 2021 Financial Plan. Although
crystallise a purpose-led strategy, with several no formal engagement with stakeholder
mega-trends acting as tailwinds, to rejuvenate groups contributed to this decision, the
long-term sustainable growth. We announced 2021 plan was a continuation of Reckitt’s
that our business would operate as three February 2020 strategy. As such, it advanced
Global Business Units: Health, Hygiene and Reckitt’s purpose-led strategy, which aims
Nutrition, leveraging scale to build capabilities to deliver strong, sustainable returns to all
and reflecting our core purpose of protecting, stakeholders. The plan included mechanisms
healing and nurturing. There would also be and resources to represent stakeholder
a specific focus on China and a company- interest and increase engagement.
wide digital capability. The implementation of Throughout this Annual Report are further
this strategy will be resourced by a three- examples of how we take into account
phase investment plan, largely funded by the likely consequences of our long‑term
productivity. At the heart of the plan is the decisions. It demonstrates how we build
relationships with our stakeholders; the
creation of long-term shareholder value,
importance of engaging with our employees;
which will be achieved by meeting the needs
of all stakeholders, through the relentless and how we understand and address
pursuit of a cleaner and healthier world. our impact on the environment and the
The COVID-19 pandemic has reinforced communities in which we operate; and how
key elements of the new strategy; it has, we strive always to behave responsibly.
for example, become sadly all too apparent
that hygiene is the foundation of health.
Our new purpose, fight and compass have
proved timely and relevant. As an example
of putting the new strategy into action in
the context of the pandemic, in June, the
Board endorsed the launch of a new business
unit, Global Business Solutions. The business
case for the launch rested on consultations
and initiatives with Reckitt’s customers and
professional partners. We also see digital
as a key area of growth and the pandemic
has accelerated the switch to digital
consumption. Our strategic priorities include
driving business performance, engaging
with our workforce and other stakeholders,
and managing potential risks, including
those arising from numerous workstreams
running concurrently under our transformation
programmes. The transformation programmes
that will help position us to meet our
business objectives may prove easier to
implement in a fast-changing world.
Reckitt Annual Report and Accounts 2020 61
 O P E R AT I N G R E V I E W : H Y G I E N E

NEVER HAS
Hygiene

HYGIENE
BEEN MORE
IMPORTANT
62 Reckitt Annual Report and Accounts 2020
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2020 performance highlights

+19.5% 25.9%
LFL Net Revenue growth Adjusted Operating Margin1

Key strategic priorities

To maximise the opportunity for our disinfectant brands

created by COVID-19, entering new markets and broadening
our product offering;
2020 turned out to be
Continue to build those capabilities that will set us up for
an extraordinary year,
sustained outperformance, especially in science and where we fully lived our
innovation, e-commerce and customer service;
purpose and fight. The
Evolve the culture of Reckitt, including embedding the new
leadership behaviours. world saw the importance
of Hygiene as the
Hygiene net revenue grew +19.5% foundation of Health.
Harold van den Broek
on a Like-for-Like basis to £5,816m GBU President
for the full year. Lysol and Finish both
delivered very strong growth, with
Lysol up over 70% for the year as a
whole. Air Wick, Harpic, Mortein and
nearly all other power brands
delivered healthy growth.
Overview
Hygiene has long been seen as a foundation of health and never more so
than in the current environment. Driven by the strong megatrends that
support sustainable market growth, our hygiene business plays a crucial
role in delivering the Group’s overarching purpose as our consumers
seek to lead cleaner, healthier lives. With globally recognised brands
such as Finish, Lysol and Air Wick, we have category-leading products in
a number of household and homecare market segments. More people
around the world are using our products than ever before, with Lysol
now used in over 100m households globally, and Harpic in over 100m
households in India alone.
Underpinning much of what we do, our people have developed
a clear purpose and fight around which our hygiene brands are built.
For example, Finish seeks to alleviate the burden of dishwashing
whilst saving water compared to manual dishwashing. Through
Air Wick, our new Botanica range is helping people connect to
nature, though more natural fragrances and a refreshing design.
2020 saw our Hygiene business rise to the challenging environment
created by the pandemic, to deliver a step-change in customer
service, manufacturing capacity and product development. Overall,
we delivered a major step-change in sales, adding an additional
£800m to revenue, with strong share gains and the entry in to new
geographies and product adjacencies for many of our brands.

1. Non-GAAP measures are defined on page 77

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 O P E R AT I N G R E V I E W : H Y G I E N E C O N T I N U E D

2020 performance
Hygiene net revenue grew +19.5% on a like C A S E S T U DY
for like basis to £5,816m for the full year. This

reflected volume growth of +17.7% and price/
mix improvements of +1.8%.
Throughout 2020, the business delivered
strong penetration-led growth with good
market share gains in most categories, with
70% of net revenue of core CMUs growing
or holding share as consumers continue
to choose our trusted brands. This broad-
based performance was notably driven
by good share gains from our leading
disinfectant (Lysol, Sagrotan etc.) and
dishwasher (Finish) brands. All major Lysol
CMUs delivered share gains, with particularly
strong growth and gains in North America.
By brand, Lysol was the strongest
performer overall, with net revenues up well
over 70%, led by growth in North America, but
with strong performances in all other markets,
including growth in a range of new countries
and categories where we expect to sustain
progress and deliver good growth in the future.
Finish also grew strongly, with growth in
excess of 20%, reflecting strong execution,
market share gains and an increase in the
frequency of use of domestic appliances.
Finish net revenues improved year-on-year
in all geographies, with particularly strong
performances in the USA and UK. Air Wick
also delivered good growth in the year, after a
slow start, led by the USA and Europe, in part
reflecting the successful launch of Air Wick
Essential Mist and a strong performance from
the base scented oils business. Mortein and
Harpic also delivered growth in all their major
geographies, with Harpic particularly strong
in India. Cillit Bang also delivered double digit
growth for the year. Overall, of our power
brands, only Vanish saw reduced sales in the
year, reflecting the impact of ‘stay at home’
behaviour on the demand for stain removal.
Adjusted operating profit for Hygiene
at £1,505m was up 21.3% on a constant
FX basis and 17.7% on a reported basis.
Adjusted operating margin was 25.9%,
50bps higher than last year. While we
accelerated investments under our plan to
rejuvenate sustainable growth, notably in
e-commerce and digital capabilities, the
increased investment was more than offset by
PURPOSE-LED
MARKETING
IN FINISH
Finish, our leading dishwasher
brand, has defined a purpose
related to saving finite resources
through simple behaviour change.
This led to a programme with
National Geographic and other
partners to firstly raise awareness
of the criticality of water in our
lives and inspire consumers to
change their behaviours to save
water – starting with dishwashing
and skipping pre-rinsing of dishes.
We started in 2019 in Turkey and
Australia and immediately saw
that purpose activation not only
led to market share gains but also
positively impacted our brand
equity and our product performance
credentials. In Turkey we grew
market share by 240bps, interacting
with 4 million people and delivering
over 20 million impressions in
Australia, we managed to grow the
category penetration by 190bps
while 170,000 people pledged
to save water with Finish.
This was followed by extending the
programme in 2020 to 11 markets in
North America and across Europe,
reaching over 350 million consumers
to drive positive impact through
behaviour change.

INCREASED 85%
record productivity and the strong leverage
generated by growth in the business.

GLOBAL Hygiene habits improved1

HYGIENE HABITS 79%

Hygiene habits have increased due to the Intend to continue hygiene
pandemic and are becoming embedded habits post-pandemic1

1. Based on Reckitt research

64 Reckitt Annual Report and Accounts 2020

 S T R AT E G I C R E P O R T G OV E R N A N CE F I N A N C I A L S TAT E M E N T S

EXPANDING OUR LEADING We’re on track for expanding

our footprint to 70 new markets
DISINFECTANT FOOTPRINT by the end of 2021
GLOBALLY

Our category-leading 2021 2021

brands have strengthened

further over the past year 112 MARKETS 61 MARKETS
Presence pre-COVID-19 Presence by end of 2021 2019: 83 markets 2019: 20 markets
Protects me Trust /
from illnesses1 credibility1

+800bps +600bps
+800bps +1200bps
+2200bps +500bps
+800bps +500bps
1. Source: H&P Equity and Reckitt internal brand attribute tracking. Q4 2020 vs Q4 2019

Reckitt Annual Report and Accounts 2020 65

 O P E R AT I N G R E V I E W : H E A LT H

IMPROVING
Health

CUSTOMER
SERVICE AND
INNOVATION
PIPELINES
66 Reckitt Annual Report and Accounts 2020
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2020 performance highlights

+12.1% 27.3%
LFL Net Revenue growth Adjusted Operating Margin1

Key strategic priorities

Capturing opportunities in new markets, segments, formats

and categories;
In 2020, we articulated
Strengthening our innovation pipeline to bring new products to
market and to drive category growth;
our purpose – and were
Further developing our digital health offering; and exploiting
immediately thrust into a
e-commerce opportunities; public health crisis, where
Remaining focused on productivity gains and simplification, Reckitt had a chance to
creating the funds to invest in growth.
contribute and do our
part. That we were able
Health revenue grew Like-for-Like to play a role in keeping
+12.1% in 2020 to £4,890m. Dettol was consumers and front line
the stand out brand, with over 50% workers protected has
growth in the year. Durex grew been a source of pride
strongly in the second half, while and satisfaction for
our over-the-counter products our teams.
successfully met exceptional Kris Licht,
GBU President
consumer demand in the first half,
before a weaker cough, cold and flu
season at the end of the year held
back overall growth.
Overview
Our Health business operates across a number of fast growing
categories, driven by many of the same megatrends as Hygiene and
Nutrition. As a result, our well-positioned portfolio of leading global and
regional brands all have strong opportunities for growth. For over-the-
counter or ‘consumer health’ brands, like Mucinex, Nurofen, Gaviscon and
Strepsils, this reflects the growing focus on self-care as state resources
become more constrained; for Durex and our other sexual wellbeing
brands, the growing importance of sexual health and awareness of
the transmission of infection; and for disinfection, the pressure of
globalisation and urbanisation which are driving the speed, variation
and penetration of viruses. The importance that consumers place on
these health and wellness issues, drives their desire for trusted solutions,
as they are reluctant to risk a compromise in quality. These dynamics
favour trusted brands – particularly in current times of uncertainty.
The 2020 performance in part reflects a number of dynamics
borne out of the COVID-19 pandemic, which has impacted the cough,
cold and flu season, socialisation, and the demand for good hygiene.
Strategically, good progress has been made in 2020, as we seek to
1. Non-GAAP measures are defined on page 77

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 O P E R AT I N G R E V I E W : H E A LT H C O N T I N U E D

rejuvenate long term sustainable growth gains of over 100bps globally and double
in the Health business. We remain focused digit revenue growth in the year, as a result
C A S E S T U DY
upon delivering consumer-centric health of sustained execution of a well-established
solutions, leveraging our heritage brands, and go-to-market models, continued white space
drawing on innovation and partnerships. expansion, and growing innovation. Looking
forward, we expect the weak cough cold
2020 performance
and flu season to significantly impact revenue
Health revenue grew LFL +12.1% in the full year
in the first quarter of 2021 as the category
to £4,890m. This reflected volume growth of
laps the exceptionally strong start to 2020.
+8.4% and price/mix improvements of +3.7%.
Progressively, comparatives become easier
Overall, Health delivered strong market
and with a strong pipeline of investments and
share growth, with 85% of core category
innovations, we expect the segment to return
market units by revenue growing share in 2020.
to good growth in the second half of the year.
Although driven principally by broad-based
Our portfolio of personal care products
gains for Dettol, Durex and Gaviscon also
grew overall, despite some weaknesses in

GAVISCON DRIVING
outperformed their respective markets.
the early part of the pandemic, with good
Consumer demand for disinfectants drove
performances from Veet and E45. Clearasil
strong demand for Dettol throughout 2020,
was also steady and while Scholl declined

MARKET SHARE
with the brand growing over 50%. With an
overall, demand showed some signs of
increased focus on effective antibacterial
recovery in the second half.
agents, Dettol achieved strong market share

GAINS
Adjusted operating profit for Health at
gains in most major geographic regions for the
£1,334m was down 0.2% on a constant FX basis
brand. In addition, a major expansion of the
and down 2.6% on a reported basis. Adjusted
geographic and category reach of the brand
operating margin was 27.3%, down 340 basis
was started, leveraging the proven capabilities
In Digestive Health, uninterrupted by points year-on-year reflecting the significant
and heritage of the Dettol portfolio. The
the COVID-19 environment, Gaviscon investments made under our plan to rejuvenate
benefits of this expansion are expected to
continued a three year run of very sustainable growth and some product mix
underpin performance in 2021 and help lock-in
strong results across all major countries. effects, partially offset by the benefits of
the market gains to date and achieve strong
Underpinning this was the sustained our enhanced productivity programme.
growth for the brand in the years ahead.
execution of a well-established Healthcare
Following a more challenging first half of
Professional and Consumer success
the year, relaxations of social distancing
model, continued white space expansion
regulations resulted in improved demand for
and a growing innovation pipeline.
our sexual well-being products, led by Durex,
in the last six months. As a result, the category
During the year, we grew market share
delivered good growth in revenue for the
globally by c.100bps, with double-digit
year as a whole. The positive trend has been
revenue growth.
particularly pronounced in markets where
the rate of pandemic infection has materially
improved. In addition, we launched ‘Durex 001’ Market share optimisation
in China in October – marking our entry into the Market share growth vs. 2019

+110bps
fast-growing Polyurethane (ultra-thin condom)
segment. With strong sales execution and
innovative marketing support through
partnerships in music and lifestyle brands,

+210bps
we are seeing strong share performance,
with total share in China up c.130bps in 2020.
We expect this innovation will help reverse
previous market share losses over the coming
quarters. Elsewhere, where our ‘Invisible’

+380bps
portfolio and Naturals lubricants platform
have been the focus, share performance
has been strong in most major markets.
In aggregate, our over-the-counter (OTC)

+390bps
portfolio saw revenue decline 3% in the full
year. The year started strongly, with good
early gains for Mucinex and the benefits
of pantry loading in the early stages of the

+180bps
pandemic. The category saw lower consumer
demand during stay-at-home conditions
and as a result of the weaker cough, cold
and flu season towards the end of the year.

+340bps
For example, the Influenza-like-Illness Index
was down over 80% in December. Within
OTC, several brands have performed well,
including Gaviscon, which delivered share

68 Reckitt Annual Report and Accounts 2020

 S T R AT E G I C R E P O R T
C A S E S T U DY
FOCUS ON:
SEXUAL WELLBEING
In a year where the COVID-19 pandemic
has significantly impacted sexual wellbeing
behaviours, Durex has continued to
challenge conventions to help break down
stigmas and taboos so that people can
enjoy sex that feels good for them. From
India to Russia, to Italy, we are increasingly
getting Durex into daily conversations and
making the brand a part of the culture.
Even during the lockdown, Durex has
found new ways to reach consumers,
with new ‘ultra-fast’ partnerships with
Glovo, Deliveroo, and Ocado Zoom. As
shoppers shifted their spending towards
e-commerce channels, Durex made the
necessary supply chain adjustments
to meet exceptional levels of demand.
The brand provided the consumers with
the content and products to support an
increase in solo sex occasions with lube-
specific bundle packs that helped deliver
market share gains in e-commerce.
G OV E R N A N CE
To keep up with the commitment to
continuously improve consumer adoption of
safe sexual behaviours via better experience
with protection products, Durex is now
offering a consistent condom orientation so
that users can open and wear them “right side
up”, always. The brand is also on the journey to
offer a better fit because “when it fits right, it
feels right.” These experience improvements
are being communicated across the
consumer journey, and in lead roll-out markets
we already see positive early results, with
share gains in both Germany and Russia.
Our premium condom products
have been supported with extensive
innovation across the world.
In China, a key market for us, we entered
in to the fast-growing PU segment, whilst
in the Performance segment, we have
extended our platform with several new
propositions. Along with strong sales
execution and innovative marketing
support with music and lifestyle brand
partnerships, we see strong share gains.
Reckitt Annual Report and Accounts 2020
F I N A N C I A L S TAT E M E N T S
In the rest of the world – AiR, and our
Naturals lubricant platform have been the
focus. Within AiR, we have increased the
number of sizes available to drive both
comfort and sensation. In Naturals, the new
variants, along with our #LadiesLetsLube
campaign, continued to bring in new
category and brand users as we breakdown
the stigmas on using the category.
With first sex being so critical to shaping
long-term attitude and behaviours, we
continue to focus on the point of market
entry programs to help young people
make informed and confident choices,
fight AIDS and STIs and celebrate
diversity and inclusivity around the world.
Throughout the year we have led with
partnerships such as Stonewell, Her,
Durex Red (Global), National AIDS Control
Organisation (India), Solidarte (France),
Dance 4Life (Netherlands), UNFPA (Mexico),
and the Ministry of Health in Russia.
69
 O P E R AT I N G R E V I E W : N U T R I T I O N

INVESTING
Nutrition

TO BUILD A
STRONGER
PLATFORM
FOR GROWTH
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2020 performance highlights

14.1%
LFL Net Revenue growth Adjusted Operating Margin1

UNCHANGED
Key strategic priorities

Improve the performance of our business in China through

driving efficiencies, reinvestment in growth and evaluating
potential strategic options;
The creation of a focused
Invest in the business more broadly to deliver mid-single digit
Nutrition business gives us
growth, capturing opportunities in vitamins, minerals and the opportunity to
supplements and adult nutrition;
leverage our outstanding
Drive further productivity to fund increased re-investment.
technology base across a
wider range of growth
2020 was an important year as we markets in infant, adult
integrated our nutrition portfolio and specialty nutrition.
and invested to address a number Aditya Sehgal,
of legacy issues. During this time, GBU President

we delivered a stable performance in

challenging conditions. Performance
in North America was particularly
strong with both our infant formula
and immunity products delivering
good growth. The Greater China
infant nutrition market remained
challenging due to the closure of
cross-border sales from Hong Kong
and increased domestic competition.
Overview
Our Nutrition business seeks to protect heal and nurture through
providing the highest quality nutrition to those at all stages of life
– from infancy to old age. With products spanning infant formula,
allergy nutrition and Vitamins Minerals and Supplements (‘VMS’),
we seek to build and develop 1:1 relationships with consumers
– personalising solutions at scale.
Our business is currently centred around infant nutrition – a large,
global market with significant barriers to entry and with the opportunity
for highly attractive margins. But with ageing populations and growing
importance placed on nutrition throughout the life cycle, we see
opportunity to rejuvenate sustainable growth for the business unit
through further expansion in to the adult and senior segments. This
leverages our science and technology expertise, with existing go to
market capabilities and in certain instances our existing brand equity in
Vitamins, Minerals and Supplements. Like our other businesses, Nutrition
1. Non-GAAP measures are defined on page 77

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 O P E R AT I N G R E V I E W : N U T R I T I O N C O N T I N U E D

is a leader in the use of e-commerce tools that In 2020, as a result of the COVID-19 pandemic
have underpinned our market development additional uncertainty has been introduced
and customer service. into the annual impairment review of the
2020 performance saw good underlying goodwill and other intangible assets of IFCN.
growth in many of our markets, with To reflect this uncertainty management The impact of the
exceptional demand for a number of our VMS has increased the pre-tax discount rate.
products more than offsetting market-specific This resulted in the IFCN net book value pandemic on our markets
challenges in our infant business. exceeding its recoverable amount, therefore
management have recorded an impairment
has been challenging, with
2020 performance
Nutrition revenue was unchanged on
loss against IFCN goodwill of £985m. Detailed lower cross-border trade
a LFL basis in the full year at £3,287m.
information can be found in Note 9.
2020 was a transformative year for some
and, short-term, a lower
This reflected a volume decline of 1.0%
and price/mix growth of +1.0%.
of our vitamins, minerals and supplements birth rate. We are taking
brands which now represent around 15% of
Infant and child nutrition (IFCN) revenues
the Nutrition business and grew over 30% in action to position the
were down 4% year-on-year, despite the
strong performance in North America from
2020. Airborne, our immunity supplement, business to turn these
grew in excess of 100% in the year, with strong
Enfamil, where new innovations such as
growth in brand awareness and consumer challenges into
NeuroPro helped the business defend a
strong share position in a growing WENR
demand as a result of heightened health
concerns. Neuriva, launched in 2019, continued
opportunities and drive
(un-subsidised) market. In particular, the
Omega3-DHA-led innovation, strong consumer
to deliver good growth with the product back towards mid-single
now commanding a 16% share of its category
insight and good execution helped improve
– up c.10% points over the previous year. digit growth in the
competitiveness and market shares in the
second half of the year. Performance in
Adjusted operating profit for Nutrition at medium term.
£462m was -34.3% lower on a constant FX
Latin America was largely as expected, after Aditya Sehgal,
basis and -35.7% lower on a reported basis.
the successful overhaul of a key spray- GBU President
Adjusted operating margin was 14.1%, down
dryer facility in Mexico, although underlying
730 basis points year-on-year reflecting a
markets remained soft, reflecting the
number of one-off charges in the second
prevailing economic climate in the region.
half of the year and the impact of weaker
The Greater China business remains a focus
market conditions and limited cross-border
area for the Group as we seek to improve
trading in Greater China. In particular, as a
operational performance and continue our
result of the Hong Kong SAR / China border
review and analysis of strategic options. We
closures, stock write-downs of stranded
will provide further updates through 2021.
product resulted in around £40m of charges
Performance of infant formula in Greater
in the last quarter. Looking forward, a number
China, which represents around 25% of our
of initiatives are underway to improve
Nutrition business and around 6% of Group
performance and we expect to be able to
revenues, was adversely impacted by ongoing
make some improvements to margins in
restrictions on cross-border trade activity
2021, and more substantially beyond, through
between Hong Kong SAR and mainland China.
productivity savings, trading improvements,
In mainland China itself, a steady market share
the benefit of product innovations and the
performance in the first few quarters of the
non-repeat of the 2020 one-off charges.
year was offset by a challenging fourth quarter
where, as expected, sales were adversely
affected by increased price competition,
particularly in the large Mother and Baby
Store channel. We continue to compete
well with our multi-national peers and grow
share in the high-premium and super-high-
premium market. However, a slowing rate
of premiumisation and more competition
from local suppliers is expected to reduce
growth opportunities in the near-term.

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C A S E S T U DY

FACTORY
$60M
After 61 years of successful operational use,
during the first half of 2020 we invested

UPGRADES IN
c.$60m in our LATAM Nutrition factory
dryer in Mexico to expand the capacity
by 20% and improve performance.

MEXICO DURING The resilience of our employees was

tested as the planned refurbishment

THE COVID-19 CRISIS

investment in our Latam
coincided with the start of the COVID-19

+20%
Nutrition factory dryer
crisis and lockdown. However, the team
worked together to maintain availability of
important SKUs across the LATAM region.

Using insights and creativity, and

demonstrating the Reckitt ‘can-do’
attitude, the team managed to improve
the IFCN business and quickly switched increase in capacity by 20%,
to virtual tools to maintain open lines and improved performance
of communication with the various
medical teams with which we partner.

Reckitt Annual Report and Accounts 2020 73

 GROUP FINANCIAL REVIEW

We’ve delivered a strong financial

performance in 2020. Net revenues were
nearly £14bn, up 11.8% LFL, driven by volume
led growth in a COVID-19 environment.
Adjusted operating profit of £3,301m was
up 0.7% at constant currency. Our adjusted
operating margin was 23.6%, 260bps lower
than last year. This was largely due to the
planned investment programme announced
in February 2020, as the operational leverage
from the strong revenue growth was
reinvested in growth initiatives and used to
offset COVID-19 related costs. On a reported
basis, operating profit was £2,160m and
included an impairment loss of £985m on
IFCN goodwill reflecting the volatility and
uncertainties relating to COVID-19. Adjusted
diluted earnings per share were 327.0p,
considerably ahead of our initial expectations.
We’ve generated very strong free cash
flow of £3,052m, up 42%. Free cash conversion
was 131%, benefiting from the negative
working capital position. We anticipate this
working capital inflow will partially unwind in
2021, albeit free cash conversion over 2020

STRONG
and 2021 is expected to be very strong.
Building a stronger balance sheet is a clear
priority. In 2020 we reduced net debt by £1.7b
to £9.0b, through improved cash generation
and maintaining strong financial discipline.
As a result, our net debt leverage metric has

FINANCIAL
improved, with Net Debt / Adjusted EBITDA
falling to 2.4x, a reduction of 0.5x in the year.
Consistent with our statement in February
2020, the Board has recommended holding
the full year dividend unchanged at 174.6p.
We will maintain the dividend per share at
2019 levels until we rebuild dividend cover

PERFORMANCE
to target levels, at which time we will be
able to resume growth in dividends in line
with the growth in adjusted net income.
Looking to 2021, set against our strong
top-line growth in 2020, we expect our
business to grow in 2021 with like for like net
revenue growth in the range of flat to +2%.
Our margin expectation for 2021 is broadly
unchanged; in line with previous guidance
we will continue to invest in growth resulting
in adjusted operating margins in 2021 being
between 40-90bps lower than 2020 levels.
Looking to the medium term, our
outlook remains unchanged. We continue
to expect to progress towards achieving
sustained mid-single digit organic
revenue growth in the medium term, and
a mid-20s margin by the mid-2020s.

Jeff Carr
Chief Financial Officer

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 S T R AT E G I C R E P O R T G OV E R N A N CE
Detailed Group Financial Review
Net revenue
On a Group basis, net revenue was £13,993m, representing 11.8% growth
on a LFL basis of which 9.6% was volume and 2.2% price/mix. This very
strong growth was volume led in a COVID-19 environment, as customers
sought trusted, heritage brands, reinforced by stronger purpose-led
brand equity and strengthened execution. Total net revenue at actual
exchange rates was up 8.9%, reflecting a foreign exchange headwind
of 2.9% principally driven by Latin American currencies.
Hygiene net revenue was £5,816m, up 19.5% on a LFL basis, of which
17.7% was volume and 1.8% price/mix. This very strong net revenue
growth was driven by Lysol and Finish, with strong growth for Air Wick,
Harpic, Mortein, Veja, Calgon and Cillit Bang. Hygiene net revenue at
actual exchange rates was up 15.6%.
Health net revenue was £4,890m, up 12.1% on a LFL basis, of which
8.4% was volume and 3.7% price/mix. This growth was driven by very
strong Dettol growth in all major markets, strong growth from Gaviscon
and improved Durex momentum. Nurofen and Strepsils declined year on
year, reflecting the weak cough, cold and flu season towards the end of
the year. Health net revenue at actual exchange rates was up 9.6%.
Nutrition net revenue was £3,287m, unchanged from the prior year
on a LFL basis, of which -1.0% was volume and 1.0% price/mix. US IFCN
growth and increased customer focus on wellness and immunity, with
Airborne up over 100%, offset the adverse IFCN market in Greater
China. Nutrition net revenue at actual exchange rates was down 2.0%.
e-commerce delivered channel growth of 56% in 2020, estimated
to be c.12% of Group net revenue.
Net revenue in the year reflects the deferral of certain shipments not
reaching customers by 31 December 2020, consistent with the passing
of control requirements under IFRS. Prior year net revenues included
these shipments, the year-on-year impact of which was not significant.
The deferral reduced net revenue for the Group by £67m in 2020, of
which £25m related to Health, £36m related to Hygiene and £6m
related to Nutrition.
Gross margin
Gross margin decreased by 20bps to 60.3% as a result of adverse
product mix principally in Health, COVID-19 related expenses and higher
costs in IFCN, including c.£40m of inventory write-downs following the
Hong Kong border closure, which together more than offset productivity
savings within our cost of goods sold.
The impact of the deferral of shipments, as disclosed above, was
negligible on gross margin.
Net operating expenses
Brand Equity Investment (BEI) was up 7%, or £138m, on a pound spent
basis (at constant currency), at 13.9% of net revenue, 50bps lower
than the prior year, reflecting leverage benefits from strong net
revenue growth in 2020, productivity initiatives to improve the ratio
of working to non-working media spend and investments in digital
talent. In absolute terms BEI increased by 5% on a reported basis.
Other costs increased by 290bps as a percentage of net revenue,
reflecting higher year-on-year performance related costs, investments
in capabilities and finite-life transformation costs.
Group operating profit
Group adjusted operating profit was £3,301m (2019: £3,367m) at an
adjusted operating margin of 23.6%, in line with our mid-year guidance
and 260bps lower than the prior year (2019: 26.2%). This largely reflects
the impact of the planned investment programme announced in
February 2020. As announced at the half year, the operational leverage
from the strong revenue growth was reinvested in our growth initiatives
and used to offset COVID-19 related costs of around £120m (c.80bps).
These COVID-19 related costs are incremental to our planned
investments and we expect them to continue into 2021.
Reckitt Annual Report and Accounts 2020
F I N A N C I A L S TAT E M E N T S
Reported operating profit was £2,160m (2019: £1,954m operating loss)
at a reported operating margin of 15.4% (2019: -15.2%). In the year to
31 December 2020, adjusting items of £1,141m are included in reported
operating profit (2019: £5,321m), this includes £985m (2019: £5,037m) of
goodwill impairment (note 9), intangible asset amortisation of £80m
(2019: £81m) and a charge in relation to the Korea HS issue of £69m (2019:
£nil). Further details on adjusting items can be found on page 78.
Net finance expense
Adjusted net finance expense was £260m (2019: £188m). The increase
of £72m is principally due to comparison with adjusted net finance
expense in 2019 which included income from significant items not
repeated in 2020. Excluding these items, adjusted net finance expense
in 2020 slightly increased as lower net interest costs on the Group’s
borrowings were offset by the interest element of an indirect tax
provision and other finance expenses recorded in 2020.
Reported net finance expense of £286m (2019: £153m) includes
£26m of finance expenses on tax balances (2019: £35m finance income)
which are reclassified to income taxes on an adjusted basis.
Tax
The adjusted tax rate, which excludes the effect of adjusting items,
was 22.7% (2019: 21.8%) in line with expectations.
The reported tax rate was 38.4% (2019: minus 31.6%). The tax rate in
2020 and 2019 was impacted by the non-taxable goodwill impairment.
Excluding this item from both years, the reported rate in 2020 increased
by c.3% to 25.2%, primarily due to the impact of the enacted increase in
the UK corporation tax rate from 17% to 19% on deferred tax liabilities
recorded on intangible assets.
Discontinued operations
Income from discontinued operations of £50m (2019: £898m expense)
relates to a partial release of a provision relating to the prior year
settlement with the Department of Justice (DoJ) in relation to Indivior
plc matters. This follows a review of outstanding items relating to the
DoJ settlement and the associated provisions. The prior period expense
reflects the charge to the Income Statement for the $1.4bn settlement
agreed with the DoJ, which was paid in full by the end of 2019, and
amounts deemed necessary to cover any remaining litigation exposure.
Earnings per share (EPS)
Adjusted diluted EPS from continuing operations was 327.0p (2019:
349.0p), the decrease of 6.3% primarily driven by lower adjusted
operating profit and higher adjusted net finance expense.
Reported diluted EPS from continuing operations was 159.3p
(2019: loss per share of 393.0p).
Balance sheet
As at 31 December 2020, the Group had total equity of £9,159m
(31 December 2019: £9,407m).
Current assets of £5,314m (31 December 2019: £5,033m) increased by
£281m, driven by higher inventories and cash and cash equivalents offset
by lower trade and other receivables.
Current liabilities of £6,938m (31 December 2019: £8,931m) decreased
by £1,993m. This decrease principally resulted from significantly lower
short-term borrowings, following repayment of commercial paper
and term loans in the year, which more than offset higher trade and
other payables.
Non-current assets of £25,978m (31 December 2019: £27,106m)
primarily comprise of goodwill and other intangible assets of £22,979m
(31 December 2019: £24,261m) and property, plant and equipment. The
£1,128m decrease in non-current assets is driven by goodwill and other
intangibles, as the result of the £985m IFCN impairment charge in
addition to a decline due to the retranslation of foreign currency
denominated assets.
75
 G RO U P FI N A N CI A L R E V I E W CO NT I N U ED

Non-current liabilities of £15,195m (31 December 2019: £13,801m)
increased by £1,394m, driven predominantly by higher long-term
borrowings following the issuance of new bonds of just under £2bn
in the year.
Net working capital
During the period, net working capital improved by £802m to negative
£2,229m (31 December 2019: negative £1,427m). Net working capital as a
percentage of 12-month net revenue is -16% (31 December 2019: -11%).
The improvement in net working capital was primarily driven by higher
trade and other payables, up £922m to £5,742m (31 December 2019:
£4,820m), and lower trade receivables, down £158m to £1,921m
(31 December 2019: £2,079m) partially offset by higher inventories, up
£278m to £1,592m (31 December 2019: £1,314m). The increase in trade and
other payables is due to higher manufacturing activity, volume related
increases to trade spend accruals and higher variable pay accruals.
Cash Flow
31 Dec 2020 31 Dec 2019
£m £m
During the year to 31 December 2020 net debt reduced by £1,795m to
£8,954m. The significant reduction in net debt was driven by strong free
cash flow of £3,052m offset by dividend payments of £1,257m. The
Group regularly reviews its banking arrangements and currently has
adequate facilities available to it.
The Group has committed facilities totalling £5,500m (31 December
2019: £5,500m) which are undrawn and available to draw. The Group
remains compliant with its banking covenants. The committed facilities
are not subject to renewal until from 2022 onwards. During 2020, the
Group temporarily drew down part of its committed facilities due to
short term illiquidity in the commercial paper market. This was repaid
in full during 2020.
Dividends
The Board of Directors recommends a final 2020 dividend of 101.6 pence
(2019: 101.6 pence), to give a full year dividend of 174.6 pence (2019: 174.6
pence). The dividend if approved by shareholders at the AGM on 28 May
2021, will be paid on 14 June 2021. The ex-dividend date is 6 May 2021.
The final dividend will be accrued once approved by Shareholders.

Cash generated from continuing operations 4,557 3,408 Capital returns policy
Less: net interest paid (267) (210) Reckitt has consistently communicated its intention to use its strong
cash flow for the benefit of Shareholders. Our priority remains to
Less: tax paid (762) (647)
reinvest our financial resources back into the business, including through
Less: purchase of property, plant &
value-adding acquisitions, in order to deliver sustainable growth in net
equipment (394) (306)
revenue and improving earnings per share over time.
Less: purchase of intangible assets (92) (137)
In managing the balance sheet, we intend to maintain key financial
Plus: proceeds from the sale of property,
ratios in line with those expected of an A-grade credit-rated business.
plant & equipment 10 37
This will broadly define acceptable levels of leverage overtime.
Free Cash Flow 3,052 2,145 Repatriating cash to shareholders through a growing dividend
Free Cash Flow Conversion 131% 87% remains a long-term goal of the business. As a result of the investments
being made in 2020 and expected to be made in 2021, which will benefit
Cash generated from continuing operations was £4,557m (2019: long-term sustainable growth, our dividend pay-out for the current year
£3,408m), higher by £1,149m primarily driven by favourable net working is above the threshold set out in our policy, i.e. of paying an ordinary
capital movements of £802m. Net cash generated from operating dividend equivalent to around 50% of total adjusted net income. As set
activities was £3,518m (2019: £1,411m) after net interest payments of out in February 2020, we will maintain the dividend pay-out per share at
£267m (2019: £210m) and tax payments of £762m (2019: £647m). 2019 levels until we rebuild dividend cover to target levels, at which time
Free cash flow is the amount of cash generated from continuing we will be able to resume growth in dividends in line with the growth
operating activities after capital expenditure on property, plant and in adjusted net income.
equipment and intangible assets and any related disposals. Free cash In line with the investment priorities, we expect to invest an
flow reflects cash flows that could be used for payment of dividends, incremental capital expenditure of around £400m in total, spread over
repayment of debt or to fund acquisitions or other strategic objectives. the next few years.
Free cash flow as a percentage of continuing adjusted net income was We will continue to rigorously evaluate our portfolio to actively
131% (2019: 87%). migrate it to higher growth.

Net debt Return on Capital Employed (ROCE)

31 Dec 2020 31 Dec 2019 The Group continues to focus on employing capital appropriate to drive
£m £m long term value creation for its shareholders. The Group’s ROCE in 2020
was 10.1% (2019: 10.3%). This is largely the result of Adjusted Operating
Opening net debt (10,749) (10,746)
Profit at constant exchange rates being broadly flat compared to the
Free cashflow from continuing operations 3,052 2,145 prior year coupled with a higher adjusted tax rate in 2020 than 2019.
Shares reissued 131 61
Purchase of investments and acquisition of
businesses (36) (36)
Dividends paid (1,257) (1,242)
Movement in lease liabilities (86) (63)
Exchange and other movements 1 272
Cash flow attributable to discontinued
operations (10) (1,140)
Closing net debt (8,954) (10,749)

76 Reckitt Annual Report and Accounts 2020

 S T R AT E G I C R E P O R T G OV E R N A N CE
Adjusted and Other Non-GAAP Measures
The financial information included in this Annual report is prepared
in accordance with International Financial Reporting Standards (IFRS)
as well as information presented on an adjusted basis.
Financial information presented on an adjusted basis excludes certain
cash and non-cash items which management believe are not reflective
of the underlying financial performance of the business. Financial
information on an adjusted basis is consistent with how management
reviews the business for the purpose of making operating decisions.
Adjusting items comprise exceptional items, other adjusting items
and the reclassification of finance expenses on tax balances.
• Exceptional items are material, non-recurring items of expense or
income.
• Other adjusting items relate to expenses or income that the Group
adjust for because their pattern of recognition is largely uncorrelated
with the underlying performance of the business. This includes the
following items:
– Amortisation of acquired brands, trademarks and similar assets;
– Amortisation of certain other intangible assets recorded as the
result of a business combination;
– Profits or losses relating to the sale of brands and related
intangible assets;
– Changes to deferred tax liabilities relating to (a) acquired brands,
trademarks and similar assets and (b) certain other intangible
assets recorded as the result of a business combination; and
– Re-cycled foreign exchange translation reserves upon the sale,
liquidation, repayment of share capital or abandonment of a
subsidiary previously controlled by the Group.
• Adjusting items include a reclassification of finance expenses on tax
balances into income tax expense, to align with the Group’s tax
guidance. As a result, these expenses are presented as part of
income tax expense on an adjusted basis.
Adjusted measures
• Adjusted Operating Profit and Adjusted Operating Profit margin:
Adjusted operating profit reflects the IFRS operating profit excluding
items in line with the group’s adjusted items policy. See page 78 for
details on the adjusting items and a reconciliation between IFRS
operating profit and adjusted operating profit. The adjusted
operating profit margin is the adjusted operating profit expressed as
a percentage of net revenue.
• Adjusted tax rate: The adjusted tax rate is defined as the Adjusted
continuing income tax expense as a percentage of Adjusted profit
before tax.
• Adjusted diluted EPS: Adjusted diluted EPS is the IFRS diluted EPS
excluding items in line with the group’s adjusting policy. See page 78
for details on the adjusting items and a reconciliation between IFRS
net income and adjusted net income. The weighted average number
of shares for the period is the same for both IFRS EPS and adjusted
EPS.
• Adjusted net working capital: Adjusted net working capital
excludes the impact of the Department of Justice (DoJ) accrual
in respect of the 2019 settlement with the DoJ in relation to
Indivior plc matters.
Reckitt Annual Report and Accounts 2020
F I N A N C I A L S TAT E M E N T S
Other non-GAAP measures
• Like-for-Like (LFL): Net revenue growth or decline at constant
exchange rates (see below) excluding the impact of acquisitions,
disposals and discontinued operations. LFL growth also excludes
Venezuela.
• Constant exchange rate (CER): Net revenue growth or decline
adjusting the actual consolidated results such that the foreign
currency conversion uses the same exchange rates as were applied
in the prior period.
• Brand Equity Investment (BEI): BEI is the marketing support
designed to capture the voice, mind and heart of our consumers.
• Net working capital (NWC): NWC is the total of inventory, trade and
other receivables and trade and other payables. NWC is calculated as
a % of last twelve months net revenue to compare changes in NWC
to the growth of the business.
• Net Debt: The Group’s principal measure of net borrowings being a
total of cash and cash equivalents, short-term and long-term
borrowings, lease liabilities and derivative financial instruments on
debt.
• Free Cash Flow and Free Cash Flow Conversion: The Group’s
principal measure of cash flow defined as net cash generated from
continuing operating activities less net capital expenditure. A
reconciliation of cash generated from operations to Free Cash Flow is
shown on page 76. The Group tracks Free Cash Flow on a % of
adjusted net income to understand the conversion of adjusted profit
into cash.
Other definitions and terms
• E-commerce: e-commerce channel net revenue is defined as direct
sales from Reckitt to online platforms or directly to consumers.
Estimates of total e-commerce sales as a percentage of group
revenues includes direct sales and an estimate of sales achieved by
our brands corresponding to sales through our omnichannel
distributors and retailer’ websites.
• Continuing operations: Continuing operations excludes any credits
or charges related to the previously demerged RB Pharmaceuticals
business that became Indivior plc. Net income/(loss) from
discontinued operations is presented as a single line item in the
Group Income Statement.
• Return on capital employed (ROCE) is defined as adjusted
operating profit after tax divided by monthly average capital
employed. Capital employed comprises total assets less current
liabilities other than borrowings-related liabilities. Total assets exclude
cash, retirement benefit surplus, current tax and a technical gross-up
to goodwill that arises because of deferred tax liabilities recorded
against identified assets acquired in business combinations. Total
assets has been adjusted to add back the impairment of IFCN made
in 2019 and 2020, so that ROCE is not increased by these impairments.
Current liabilities exclude legal provisions recorded as a result of
exceptional items and current tax.
77
 G RO U P FI N A N CI A L R E V I E W CO NT I N U ED

The table below reconciles the Group’s reported IFRS measures to its adjusted measures for the year ended 31 December 2020.

Adjusting items
Finance
Exceptional Other Expense
Reported items1 Items2 Reclass3 Adjusted
Year ended 31 December 2020 £m £m £m £m £m

Operating Profit 2,160 1,061 80 – 3,301

Net finance expense (286) – – 26 (260)
Share of loss of associate (1) – – – (1)
Profit before income tax 1,873 1,061 80 26 3,040
Income tax expense (720) (3) 59 (26) (690)
Net income from continuing operations 1,153 1,058 139 – 2,350
Less: Attributable to non-controlling interests (16) – – – (16)
Net income from continuing operations attributable to owners of the parent
company 1,137 1,058 139 – 2,334
Net profit for the period from discontinued operations 50 (50) – – –
Total net income for the year attributable to owners of the parent 1,187 1,008 139 – 2,334
Diluted earnings per share (EPS) from continuing operations 159.3p 327.0p

1. Exceptional items include £985m impairment on IFCN Goodwill (2019: £5,037m) (note 9), a charge of £69m (2019: £nil) relating to the Korea HS issue and a charge of £7m relating to
previously announced restructuring projects (principally RB 2.0 costs). Included within income tax expense is a £3m tax credit for these exceptional costs
2. Other adjusting items of £80m relate to the amortisation of certain intangible assets recognised as a result of the acquisition of MJN. Included within income tax expense is a net
£59m charge, being a £19m tax credit in respect of this amortisation offset by a £78m tax charge to adjust deferred tax liabilities for intangible assets for the UK tax rate change
3. Adjusting items of £26m relate to the reclassification of interest expense on income tax balances from net finance expense to income tax in the adjusted measures

The table below reconciles the Group’s reported IFRS measures to its adjusted measures for the year ended 31 December 2019.

Adjusting items
Finance
Exceptional Other Expense
Reported items2 Items3 Reclass4 Adjusted
Year ended 31 December 2019 £m £m £m £m £m

Operating (Loss)/Profit (1,954) 5,240 81 – 3,367

Net finance expense (153) – – (35) (188)
(Loss)/Profit before income tax (2,107) 5,240 81 (35) 3,179
Income tax expense (665) (45) (18) 35 (693)
Net (loss)/income from continuing operations (2,772) 5,195 63 – 2,486
Less: Attributable to non-controlling interests (13) – – – (13)
Net (loss)/income from continuing operations attributable to owners of the
parent company (2,785) 5,195 63 – 2,473
Net loss for the period from discontinued operations (898)1 898 – – –
Total net (loss)/income for the year attributable to owners of the parent (3,683) 6,093 63 – 2,473
Diluted earnings per share (EPS) from continuing operations (393.0)p 349.0p

1. Exceptional items within Discontinued Operations of £898m relate to charges in relation to the settlement amount for the US Department of Justice (“DoJ”) and the US Federal Trade
Commission investigations. Refer to Note 29 for further details
2. Exceptional items within Operating Profit of £5,240m relate to MJN integration / RB2.0 costs (£113m), restructuring and other projects (£11m), IFCN impairment of goodwill (£5,037m)
and Oriental Pharma impairment of intangible assets (£79m). Included within income tax expense is a £45m income tax credit for these exceptional costs
3. Other adjusting items of £81m relate to the amortisation of certain intangible assets recognised as a result of the acquisition of MJN. Included within income tax expense is a £18m
income tax credit in respect of these costs
4. Adjusting items of £35m relate to the reclassification of interest income on income tax balances from net finance expense to income tax in the adjusted measures

78 Reckitt Annual Report and Accounts 2020

 S T R AT E G I C R E P O R T G OV E R N A N CE F I N A N C I A L S TAT E M E N T S

C L I M AT E - R E L AT E D R I S K A N D O P P O R T U N I T I E S

CLIMATE-
RELATED
FINANCIAL RISK
Climate-related financial risk
is monitored through our
executive and Board, with
mitigation and adaption activity
in our product development
and supply chain operations.

Following an initial assessment

of the potential areas of climate-
related financial risks in 2018
which helped to inform our
activity, we have begun a further,
more detailed assessment in
conjunction with Judge Business
School. This is considering both
risks and opportunities posed by
climate change through our value
chain, from the origin of our raw
materials, to our manufacturing
operations and how they may
be affected by adverse weather
patterns and rising temperatures,
to the potential changes to
consumer spending patterns
that climate change may bring.

This will further inform our activity,

for example influencing product
development to create more
sustainable products with lower
carbon and water footprints;
reducing Greenhouse Gas emissions
and using renewable energy; and
increasing resilience to water
stress. That work includes our own
operations and those of our suppliers,
considers the way ingredients
are developed and sourced, and
considers how consumers use
and dispose of our products.

A detailed disclosure on climate-

related financial risk, including
our climate related risks and our
activities to address them are in
our Insight on Climate Change,
which can be downloaded at
www.reckitt.com/sustainability/
policies-and-reports.

Reckitt Annual Report and Accounts 2020 79


Our approach to integrated
risk management at Reckitt
Risk management occurs at different levels in Reckitt with identification and
assessment performed at the functional, Global Business Unit, corporate and Group
levels to provide both a ‘top-down’ and ‘bottom-up’ three-dimensional view of risk
and is implemented as follows:
Functional
risk assessments
Consolidation and critical
challenge by Risk Management
• Identifies and monitors risks
impacting the operation of
each function or functional
area
WHAT
• Controls are mapped to the
three lines of defence
• Detailed management action
plans are developed to
address control gaps
• Completed annually,
WHEN
reviewed quarterly with
updates provided to the
Audit Committee
• Functional risks are reviewed • Global Business Unit risk
in detail annually to identify
any changes to the risk profile
including new risks and
changes in assessment
• Formal sign-off by functional
HOW
heads with Group CFO
• Updates on top risks and
associated mitigations are
reported to the Risk,
Sustainability & Compliance
Committee (RSCC) and
Audit Committee on a
quarterly basis
• Risk assessment owned by
WHO
functional leadership team
• Functional risk owners
assigned to each specific risk,
controls and action plans
80
R IS K M A N AG EM ENT
Global Business Unit/ Group principal and Board Annual
corporate risk assessments emerging risk assessment oversight Report
Principal and emerging risks identified
Reviewed by Global Business Unit /
through the Group Risk Assessment are
corporate function leadership teams
disclosed in Reckitt’s Annual Report
• Identifies and monitors risks • Identifies the most significant • Oversight across each
with the potential to impact principal and emerging risks principal risk provided by a
each Global Business Unit and with potential to impact nominated Board Committee
the corporate centre the Group
• High-level control strategies • Principal and emerging
and action plans are risks are disclosed in the
documented for each risk. Annual Report
Supporting functional risks
are referenced
• Completed annually in • Completed annually in • Periodic reporting and risk
advance of the Global advance of the Global deep dives occur with input
Business Unit strategic Business Unit strategic from the risk owner
planning process planning process
• One-to-one meetings are
assessments are reviewed held with all Group Executive
and updated annually through Committee (GEC) members,
a series of one-to-one Group functional and
meetings with Global assurance heads, external
Business Unit leadership advisors and Non-Executive
• For corporate functions, the Directors (NEDs)
functional risk assessments • Synthesised output formally
are reviewed and challenged reviewed and signed off by
the GEC and thereafter by
the Board
• Global Business Unit/ • Group Risk Management • GEC owner
corporate management • GEC owners assigned with
teams led principal and emerging risks
circulated to the Board for
final review and sign-off
Reckitt Annual Report and Accounts 2020
 S T R AT E G I C R E P O R T G OV E R N A N CE F I N A N C I A L S TAT E M E N T S

Our approach to principal and emerging risk assessment

The Group principal and emerging risk assessment is an integral part of the integrated risk
management framework above, identifying the principal and emerging risks with the greatest
potential to impact the Group. The assessment is completed annually in advance of the Global
Business Unit and corporate strategic planning process as follows:

Identification Control Assessment of net risk Management

of risks strategy and prioritisation action

What could impact Reckitt

What are we doing to How comfortable are we What more do
and the achievement of its
manage the risk? with the level of risk? we need to do?
objectives?

• Identifies the most significant
principal and emerging risks
with potential to impact
the Group
• One-to-one meetings are held
with all GEC members, Group
functional and assurance heads,
external advisors and NEDs
• Functional, Global Business Unit
and corporate risk assessments
feed into this process
• Identifies sources of risk, key
drivers and areas of impact
• Completed annually in advance
of the Global Business Unit
strategic planning process
• Control strategy is reviewed to
establish if it is appropriate and
operating as intended
• Where we identify control
gaps, what more do we need
to do?
• Considering the controls we
have in place to manage
each risk:
– What is the probability that
the risk will materialise?
– If it did, what would the
likely impact be?
– How comfortable are we
with how the risk is being
managed?
– Is the risk within an
acceptable level of
appetite?
• Assessment identifies those
risks and controls where
management should focus
its effort
• The decision to act will be
based on which risks are no
longer acceptable
• Having identified areas of
highest risk that require
attention, action plans are
developed by management to:
– address any control gaps
identified
– improve the effectiveness
of existing controls, thereby
reducing the probability
and impact to an
acceptable level
• GEC owners assigned, with
principal and emerging risks
circulated to the Board for final
review, sign-off and ongoing
monitoring
• Principal and emerging risks
are disclosed in the Annual
Report

Reckitt Annual Report and Accounts 2020 81

 R I S K M A N AG E M E N T CO NT I N U ED

Our principal and emerging risks, as at 31 December 2020

Key to principal risks
Category ID Risk title Risk statement

1 COVID-191 COVID-19 causes significant disruption to core business processes in key markets,
impacting our ability to meet customer and consumer demand and protect our
employees.

2 Product Safety Robust process, systems and culture for the development and assessment of product
safety are not in place or operating effectively, leading to safety risk to consumers.

3 Supply Disruption1 Disruption to the continuity of supply as a result of inability to procure critical ingredients
and/or reliance on single factories that supply key markets without actively qualified
contingencies in place.
Operational

4 Cyber Security As a complex global organisation, there is a risk that Reckitt falls victim to increasingly
sophisticated cyber-attacks aimed at causing disruption to our information assets by
destruction, circumventing confidentiality, integrity or availability controls.

5 Employee Health & Safety Work accidents leading to death, injury or illness of Reckitt employees wherever they are
working and other workers on Reckitt premises or premises under Reckitt supervision, in
case of outsourced operations.

6 Sustainability1 Failure to address existing and emerging environmental and social risks and
opportunities, and changing societal expectations of businesses in addressing these,
creates underlying risk to business resilience and growth, risking stranded assets or
missed growth opportunities.

7 Adherence to Product Non-compliance with applicable quality regulations, guidelines and internal/external
Quality Standards1 standards across the product lifecycle governing how we produce and supply product.

8 Innovation1 The current innovation pipeline does not meet the changing needs of our consumers and
new go-to-market channels, and is not sufficient to achieve organic growth ambitions
and drive gross margin accretion.
Strategic

9 Disruption1 Inability to respond, adapt and evolve both our products and processes to disruptive
market forces including e-commerce, digital and new formats, impacting our ability to
effectively service our customers and consumers with the required agility.

10 China1 Risk of economic uncertainty in China, changing regulations and changes in current or
new partners impacting growth and business performance.

11 People1 Failure to achieve strategic objectives as a result of significant management churn and
People

inability to attract and retain top talent.

12 Tax Disputes Significant unprovisioned cash outflows as a result of tax authority challenge to filed tax
Financial

positions in territories.

13 Product Regulations Non-compliance with product classification regulations, guidelines, internal standards
and/or registrations across the supply chain and throughout the product lifecycle.
Compliance

14 Legal & Compliance We are not fully compliant with relevant laws and regulations, including anti-corruption
laws, data privacy laws and global competition laws.

15 South Korea Financial and reputational risk as a result of the health issues caused by consumers
inhaling a humidifier sanitiser previously sold by Oxy, which Reckitt acquired in 2001.

BS Black Swan Event Multiple brands and territories impacted by an unforeseen probably reputational incident.
Other

1. See Viability Statement on page 93

82 Reckitt Annual Report and Accounts 2020

 S T R AT E G I C R E P O R T G OV E R N A N CE F I N A N C I A L S TAT E M E N T S

Principal risks

BS
Mitigation activity
Colour indicates extent of activity outstanding to mitigate in
line with risk appetite.
Critical

All significant mitigating actions are in place and operating effectively

9 3 1
Some significant actions remain in progress

14 2 4 8
10 Significant and urgent actions remain under way
15
Major

Risk movement
Arrows indicate movement from prior year position.
Impact

13 7

11 Direction and distance of movement.

6
12
Moderate
Manageable

Remote Possible Likely Highly Likely

Probability

Interconnectivity of risks
S

15 Action planning to mitigate principal risks is complicated by

BS P the interconnectivity between them, requiring robust
14 1
oversight by leadership teams to prioritise time and
resources as appropriate.
G
13 2 Strategic Financial

Operational Compliance

People Emerging

12 3
S Sustained/deepening economic recession

P Pandemic-related litigation and regulation

G Geopolitical

11 4

10 5

9 6

8 7

Reckitt Annual Report and Accounts 2020 83

 R I S K M A N AG E M E N T CO NT I N U ED
1. COVID-19
Risk movement: Oversight accountability
New risk Executive ownership resides directly with the
Group Executive Committee, with each Global
Business Unit responsible for their respective
deliverables. Board oversight is provided by
the main Board.
The risk: COVID-19 causes significant disruption to core business
processes in key markets, impacting our ability to meet customer and
consumer demand and protect our employees.
Potential impact
The impacts of this risk are broad reflecting the wide-ranging disruption
caused by the pandemic. Chief among these has been the impact on our
workforce, both protecting those working at Reckitt sites and supporting
the remainder through a prolonged period of remote working; and the
supply chain disruption that has impacted our ability to produce and ship
our products.
Mitigation progress in 2020
In response to the pandemic, a Group-wide cross-functional COVID-19
Decision Making Forum was established to oversee the Group’s response
to the evolving crisis. The Forum was supported by Global Business Unit
crisis teams tracking local developments, including infection rates.
Essential business functions, roles and critical processes were identified
and subject to contingency planning.
Site-specific protocols and remote working safeguards were
introduced where required. A programme of global and local wellbeing
initiatives was established to support employee health and wellbeing.
Across the Supply organisation, continuity responses were activated
which included engagement of new suppliers for critical materials, daily
reviews of manufacturing capacity across our network of factories and
manufacturing partners, and partnership with logistics providers ensuring
we could move products across closed borders.
Current control strategy
As the pandemic continues into 2021, return to work protocols have
been established to ensure both compliance with local government
requirements as well as respect for each individual’s personal situation.
Additional safety measures have been introduced across our sites and are
supported with a set of global procedures. We continue to support our
employees through regular updates and dedicated resources online.
Activity impact for 2021
Our Group-wide and local COVID-19 response procedures are continually
reviewed to ensure they are appropriate and reflect any further
developments. It is anticipated that, while some disruption will continue
into 2021, this will reduce as our new ways of working become further
embedded. Target rating from current Red to Green by the end of 2021.
84 Reckitt Annual Report and Accounts 2020
2. PRODUCT SAFETY
Risk movement: Oversight accountability
No change Executive ownership resides with the Chief
R&D Officer, who drives activity through
each of the Global Business Unit executive
leadership teams. Board oversight is provided
by the CRSEC Committee.
The risk: Robust process, systems and culture for the development and
assessment of product safety are not in place or operating effectively,
leading to safety risk to consumers.
Potential impact
Product safety issues lead to reputational damage with consumers,
customers or regulators. Significant financial losses could arise from supply
disruption, product recalls, delayed launches, penalties and a loss of
consumer trust, as well as possible criminal liability for senior management.
Any gaps in the completion of our safety assessments and a lack of
anticipation of new safety concerns could exacerbate any potential impact.
Mitigation progress in 2020
Several product safety related programmes have been completed or
remain on plan for completion. PLM (Product Lifecycle Management)
implementation is ongoing and includes the digital integration of cross-
functional systems (Safety, Regulatory, Pharmacovigilance, Quality, Supply
and Procurement) to provide greater control, compliance and reduce
manual intervention across the product lifecycle.
A Chief Safety Officer has been appointed with additional medical
safety personnel now in role. Product safety training has been rolled out
to all employees, as well as specific training for relevant employees to
understand their role in ensuring SQRC (safety, quality and regulatory
compliance) for Reckitt products.
We have made investment into consumer relations to improve consumer
data insights and awareness of social media to identify emerging trends,
themes and safety concerns.
Current control strategy
As part of the evolution of our product safety and regulatory processes, the
SQRC function has now been integrated into the Supply and R&D functions.
This restructure will help to further embed product safety into each of the
Global Business Units by driving proximity to markets whilst also providing
centralised oversight and assurance services.
A robust quality management system is underpinned with clear policies
and supporting systems, which are subjected to comprehensive and
independent regular audit review. Consumer safety and vigilance teams
within the Global Safety Assurance function conduct pre-market safety
reviews and monitor and report on adverse events.
Our Global Safety Assurance function reports through R&D and is
accountable to the Risk, Sustainability & Compliance Committee (RSCC)
and thereafter to the Corporate Responsibility, Sustainability, Ethics &
Compliance (CRSEC) Committee.
Activity impact for 2021
2021 will see the continued roll-out of the upgraded PLM system to better
enable compliance management throughout the lifecycle. The Product
Integrity Review (PIR), ensuring all Reckitt products have a refreshed
compliance review, and change management programmes will be
completed in the first half of 2021. Innovation and business processes
continue to be adapted to ensure safety diligence requirements are fully
implemented. Target rating to remain Amber at the end of 2021. This is a
multi-year deliverable to replace current systems.
 S T R AT E G I C R E P O R T G OV E R N A N CE
3. SUPPLY DISRUPTION
Risk movement: Oversight accountability
No change Executive ownership resides directly with
the Chief Supply Officer. Board oversight is
provided by the main Board.
The risk: Disruption to the continuity of supply as a result of inability to
procure critical ingredients and/or reliance on single factories that
supply key markets without actively qualified contingencies in place.
Potential impact
Such disruption could result in supply shortages and importation barrier
issues, leading to loss of sales and market share. Also, potential loss of
competitiveness and profitability from service level deterioration arising
from factory capacity constraints, warehouse or transport set-up charges
or insufficient change capability in factory and/or supply services, including
forecasting accuracy and capabilities.
COVID-19 has further heightened this risk, through global shortages of
critical materials required for COVID-19 essential products, the impact of
the virus on labour availability, capacity constraints and disruption to
logistics as a result of closed borders and other factors.
Mitigation progress in 2020
In response to the COVID-19 pandemic, emergency business continuity
projects were activated to ensure continuity in servicing our customers.
These included increasing safety stock levels, shifting volumes across the
network and to external manufacturing partners, and activating alternative
suppliers of key materials.
An end-to-end planning reset is under way to drive proactivity and
better balance supply and demand. This will help to strengthen the resilience
of our supply chain through investments in upstream supply resilience;
alternative sites of manufacture; adequate manufacturing capacity; robust
products; manufacturing processes and holistic packaging design.
Current control strategy
Procurement, manufacturing and supply services have defined
manufacturing and quality control processes to ensure products are safe
and meet all regulatory and legal requirements.
Continued investment to reduce monosourcing risk across raw and
packaging materials through dedicated programmes focusing on priority
materials in Hygiene, Health and Nutrition.
Increased investment in manufacturing facilities to enhance reliability
and continuity of supply. Factories have been assessed and those
considered key or strategic have received investment to attain Highly
Protected Risk (HPR) status by our insurers. Review of business interruption
insurance policies to ensure adequate cover is in place.
Activity impact for 2021
A Group-wide business continuity programme has recently commenced
to strengthen existing business continuity arrangements for products,
sites and functions, including ongoing delivery of ingredient planning
across specific brands and markets alongside qualification of secondary
manufacturing sites. This will allow us to increase the resilience of our
supply chain and provide more robust business continuity processes
throughout the portfolio. Target rating to remain Amber at the end of 2021.
Reckitt Annual Report and Accounts 2020
F I N A N C I A L S TAT E M E N T S
4. CYBER
Risk movement: Oversight accountability
Increasing Executive ownership resides directly with the
Group Chief Information & Digitisation Officer.
Board oversight is provided by the main Board.
The risk: As a complex global organisation, there is a risk that Reckitt
falls victim to increasingly sophisticated cyber-attacks aimed at
causing disruption to our information assets by destruction,
circumventing confidentiality, integrity or availability controls.
Potential impact
Significant business disruption, data destruction or theft, regulatory
non-compliance, reputational damage, financial loss and constraints in
delivering global business strategy.
This risk is heightened by the increasing volume and types of sensitive
personal data held, a strengthened regulatory environment including
significant financial penalties for non-compliance and the growing number
and complexity of connected digital systems. These include third parties,
cloud and digital service providers.
Mitigation progress in 2020
Phase 1 of the Cyber Transformation Programme was successfully completed
in early 2020 and included removal of legacy platforms; increased IT security
team headcount; new cyber response playbooks and processes; advanced
threat protection; and continued improvements to system recovery speed
and capability. It also covered areas such as improving baseline identity and
access management for some financial systems as well as multi-factor
authentication to protect Reckitt system identities.
We have launched the next phase of our multi-year cyber security
strategy which will further reduce cyber risk through investment in our
cyber security baseline, agility and innovation to stay as close as possible
to emerging cyber threats.
Current control strategy
Our strategy places continued focus on reducing cyber risk whilst
improving the maturity of our security posture, upgrading our capabilities
and supporting business agility, innovation and the strategic growth
agenda. We apply industry standards and methodologies to establish the
control framework including ISO and National Institute of Standards and
Technology (NIST) guidelines.
Through increasing engagement with the business and partners,
advancement of our cyber capabilities and renewed focus on risk
ownership and accountability, the Group Cyber Transformation Programme
will continue to evolve the cyber security strategy and framework, and
implement the correct controls to mitigate cyber risk.
Activity impact for 2021
Phase 2 of the Cyber Transformation Programme begins in 2021 and over
the next three to four years will continue to invest in and embed cyber
security processes across the Group.
This includes enhancements to operational technology in critical
factories, identity and access management for critical business
applications, digital security, building stronger cyber defence detection and
response capabilities to cover our multi-cloud strategy as well as uplifting
Reckitt colleague cyber awareness and education. This risk is dynamic and
constantly evolving, and as such target rating to remain Amber at the end
of 2021.
85
 R I S K M A N AG E M E N T CO NT I N U ED
5. E MPLOYEE HEALTH
& SAFETY
Risk movement: Oversight accountability
Decreasing Executive ownership resides directly with the
President of each Global Business Unit. Board
oversight is provided by the CRSEC
Committee.
The risk: Work accidents leading to death, injury or illness of Reckitt
employees wherever they are working and other workers on Reckitt
premises or premises under Reckitt supervision, in case of outsourced
operations.
Potential impact
Impacts are wide ranging and variable in materiality; they may include loss
of life, debilitating injury, ongoing damage to brand/employer reputation,
reduced operational efficiency from factory closure or significant supply
disruption, impaired financial performance from lost sales, fines or
remediation cost and possible criminal liability for senior management.
Mitigation progress in 2020
COVID-19 health and safety policies, standards and return to work
protocols have been published and adopted across our sites, with key
messages cascaded through the GBU and Supply leadership teams.
Local audits were completed where required by regulators to comply
with COVID-19 regulations.
We have launched an extensive programme to embed a heightened
Employee Health & Safety (EH&S) culture across the enlarged Group
through rigorous auditing, culture days, surveys and training initiatives.
A Driver Safety Standard programme has been deployed. Engineering
standards are in place and a Global Engineering Compliance team for
structural auditing has been established. Group ISO 45001 or OHSAS 18001
certification is complete across all Reckitt in-scope sites and our Group EHS
Standards continue to be enhanced to meet scope.
Current control strategy
Policy and enhanced EH&S standards are in place and reinforced through
an audit compliance programme (including self-assessment, site visits,
assurance of improvement actions, KPI tracking and culture surveys) by a
second line of defence compliance team within Supply, and ongoing EH&S
training across all sites including commercial offices. During COVID-19
related travel restrictions, technology aided inspections and site coaching
calls. Oversight from the Supply leadership team as well as the Group Risk,
Sustainability & Compliance Committee (RSCC).
Activity impact for 2021
We will continue to roll out the programme of culture surveys and safety
days to increase awareness and continue with the rigour of auditing and
supporting the business through supply, commercial and R&D site visits
Target rating to remain Amber at the end of 2021.
86 Reckitt Annual Report and Accounts 2020
6. SUSTAINABILITY
Risk movement: Oversight accountability
No change Executive ownership resides directly with
the CEO and the Head of Corporate Affairs
& Chief Sustainability Officer. Each Global
Business Unit is responsible for their
respective deliverables. Board oversight
is provided by the CRSEC Committee.
The risk: Failure to address existing and emerging environmental and
social risks and opportunities, and changing societal expectations of
businesses in addressing these, creates underlying risk to business
resilience and growth, risking stranded assets or missed growth
opportunities.
Potential impact
Failure to increase the sustainability of our environmental and social
footprint may lead to increased scrutiny from consumers, customers,
NGOs and ESG related investors. The impacts of this are broad in range
and include reputational damage; adverse public perception; resource
inefficiency; loss of market share as consumers shift towards ‘greener’
products; omission from established sustainability indices impacting
future investment; and potential regulatory penalties.
Climate change has the potential to significantly disrupt Reckitt’s
operations through an increased number of extreme weather events,
water crises and ecosystem loss.
Mitigation progress in 2020
We continue to focus on strengthening our processes, programmes
and controls alongside our external stakeholder relationships, through
partnerships with NGOs, academia, and critical opinion formers. Our 2030
Sustainability Strategy has been launched and appropriately resourced to
progressively deliver performance targets.
A holistic packaging strategy is in development, supporting both
e-commerce and traditional retail channels with levels of packaging use.
The expansion of our Human Rights programme beyond our supply chain,
using the Societal Impact Framework to assess and address human rights
impacts along the full value chain, is on track.
Our sustainability and governance capability has been enhanced
through the establishment of the Risk, Sustainability & Compliance
Committee (RSCC).
Current control strategy
We are progressively embedding plans and resources to deliver an
environmental strategy in the supply chain in support of climate change
and water efficiency, with capex plans, environment project identification,
local and global capabilities and capacity to support environmental
performance improvement.
At a Global Business Unit and brand level, we are driving sustainability
through customer-facing programmes, delivery of ingredients, packaging
and sourcing programmes. We continue to embed sustainability into the
product development process by evaluating all new innovation against a
set of sustainability criteria.
Activity impact for 2021
Internal and external initiatives, along with greater transparency on
non-financial sustainability indicators, will help to drive increased
awareness of our sustainability agenda across our global network. Target
rating to remain Amber at the end of 2021. This is a multi-year deliverable
to build and embed the significant actions required.
 S T R AT E G I C R E P O R T G OV E R N A N CE
7. A DHERENCE TO PRODUCT 8. INNOVATION
QUALITY STANDARDS
Risk movement: Oversight accountability
No change Executive ownership resides directly with
the Chief Supply Officer, who drives activity
through each of the Global Business Unit
executive leadership teams. Board oversight
is provided by the CRSEC Committee.
The risk: Non-compliance with applicable quality regulations, guidelines
and internal/external standards across the product lifecycle governing
how we produce and supply product.
Potential impact
Impacts are wide ranging and may include a consumer safety incident,
regulatory failures, loss of sales (including product recall) and adverse
reputational impact, a supply disruption or factory closure, or potential
civil/criminal actions against individuals. The risk is heightened by the
increasing scrutiny, complexity, frequency and stringent audit requirements
enforced on our factories by regulators.
Mitigation progress in 2020
We have made significant investment in ensuring the upmost quality of
our products and compliance with all applicable regulations and standards.
These measures include assurance programmes covering predictive
quality, culture of quality, technology enabled fail-safe controls, quality
audit programmes across manufacturing sites and supplier facilities,
and transformation of our consumer relations function.
Quality KPIs and metrics are routinely presented and discussed at each
Global Business Unit, Risk Sustainability & Compliance Committee (RSCC)
and the Corporate Responsibility, Sustainability, Ethics & Compliance
(CRSEC) Committee meeting.
Current control strategy
Reckitt’s Quality standards have been defined, communicated and
embedded within our standard operating procedures. A quality audit
programme to assess compliance with Reckitt’s Quality standards across
manufacturing sites has been established and is being delivered against.
In 2020, the audit schedule was reprioritised and adapted to respond to
COVID-19 travel restrictions.
Continued investment in key Quality transformation programmes
including implementation of a systematised product safety and compliance
programme through the Product Lifecycle Management (PLM) project,
and an end-to-end quality review of the product portfolio through the
Product Integrity Review (PIR). COVID-19 impact assessments have been
performed to identify risks to programme delivery and agreed timescales.
Activity impact for 2021
We continue to look for opportunities to optimise our quality assurance
processes and the use of quality data to drive continuous improvement
across the product lifecycle. Target rating to remain Amber at the end
of 2021.
Reckitt Annual Report and Accounts 2020
F I N A N C I A L S TAT E M E N T S
Risk movement: Oversight accountability
Decreasing Executive ownership resides directly with the
President of each Global Business Unit. Board
oversight is provided by the main Board.
The risk: The current innovation pipeline does not meet the changing
needs of our consumers and new go-to-market channels, and is not
sufficient to achieve organic growth ambitions and drive gross margin
accretion.
Potential impact
Failure to understand and effectively respond to changing consumer
wants, needs and behaviours (including COVID-19) may lead to loss
of market share to small entrepreneurial companies leveraging new
channels and digital media.
Inability to execute innovation may result in failure to achieve the
necessary innovation rate hurdles (in terms of growth contribution and
GM accretion), impacting organic top-line growth.
Mitigation progress in 2020
Continued investment in science to better scale, leverage and accelerate
our innovation pipeline. Our Chief Research & Development (R&D) Officer
is now in role and is leading the elevation of our science capability and
platforms, and driving external partnerships to co-create innovations.
The R&D organisation is structured with dedicated teams focused on
delivering innovation for global brands and operational teams focused on
local brands. Frontline resources have been deployed in-market to drive
proximity to consumers.
Our Centre for Scientific Excellence is now operating in Hull, as a
world-leading R&D facility for the healthcare portfolio.
Current control strategy
Base business innovation is driven through a three-year pipeline and
resource allocation process. We continue to invest in building capability
in core technical areas and establishing cross-functional teams that
participate in and assess new growth platforms and white space.
Dedicated resourcing has been deployed to deliver on e-commerce
first focused innovations.
Our consumer data and insights capability has been strengthened with
a dedicated team focused on insight generation and idea validation through
new digital tools for faster and more accurate innovation modelling.
Activity impact for 2021
A Category Development Organisation (CDO) is being established within
the Nutrition GBU and will be focused on delivering successful innovation
to market. Historically this global CDO organisation was part of the wider
Health CDO team.
Innovation models will continue to evolve during 2021 and will broaden
as additional drivers of innovation growth are identified. It is expected that
further enhancement of our innovation pipeline monitoring and reporting
will focus on identifying root causes of execution slippage. Target rating to
remain Amber at the end of 2021. This is a multi-year deliverable to build
and embed the significant actions required.
87
 R I S K M A N AG E M E N T CO NT I N U ED
9. DISRUPTION
Risk movement: Oversight accountability
No change Executive ownership resides with the
President of each Global Business Unit. Board
oversight is provided by the main Board.
The risk: Inability to respond, adapt and evolve both our products and
processes to disruptive market forces including e-commerce, digital
and new formats, impacting our ability to effectively service our
customers and consumers with the required agility.
Potential impact
2020 has seen dramatic changes to the ecosystem and competitive
landscape in which we operate, many of these changes arising from
COVID-19 and its impact around the globe.
Failure to respond to these disruptions may result in share loss to
insurgent brands that are more consumer-centric and reduce our ability to
identify and exploit rapidly growing channels, impacting top-line growth.
Mitigation progress in 2020
eRB has now been launched as a dedicated organisation to drive and
support each Global Business Unit with digital business development, build
capability through technology and infrastructure, and incubate new brands
and partnerships.
Four capability centres have been established to share excellence
across Global Business Units in the areas of Marketing Excellence, Sales
Outperformance, Medical and e-commerce. These centres will develop
functional capabilities, drive economies of scale and scope, and provide
tools and technology enabling best practice sharing.
Chief Customer and Chief Information & Digitisation Officers have been
appointed to strengthen customer relationships and drive new business
models for our increasingly digital consumers.
Global Business Solutions launched in 2020 to support businesses with
the expertise, knowledge and products they need to make their workplaces
and outlets hygienically safe for both consumers and employees.
Current control strategy
Continued investment in capability and technology, enabling us to harness
the power of all channels, all platforms, all brands, in all markets. Pursuit of
external partnership opportunities to identify, incubate and launch new
brands and ventures, driving future growth. Entering new growth spaces
will also allow us to reach and acquire more consumers.
Activity impact for 2021
The Digital Factory will be established in 2021, in collaboration with
Marketing Excellence and consumer relations, focused on harnessing
and building e-commerce expertise across GBUs and markets.
Internal and external initiatives will continue to increase capability and
drive incremental growth across priority channels and segments. Target
rating to remain Amber at the end of 2021. This is a multi-year deliverable
to build and embed the significant actions required.
88 Reckitt Annual Report and Accounts 2020
10. CHINA
Risk movement: Oversight accountability
New risk Executive ownership resides directly with
the President Nutrition, eRB & Greater China
business. Board oversight is provided by the
main Board.
The risk: Risk of economic uncertainty in China, changing regulations
and changes in current or new partners impacting growth and business
performance.
Potential impact
China is a critical market increasingly characterised by economic and
regulatory uncertainty. The behaviours of Chinese consumers are also
changing which, alongside other economic factors, have the potential
to impact our operations and performance in this market.
Mitigation progress in 2020
Reflecting China’s importance, we have launched an integrated
cross-GBU organisation in China. eRB & Greater China is an innovative, agile
and digital business that will deliver innovation, capability and growth to
Reckitt globally. This new organisation will allow us to better leverage our
scale across the Greater China area while maintaining agility, boosting
partnerships to support our growth ambitions and driving China-centric
innovation through bespoke design and innovation hubs.
Current control strategy
We maintain a strong network in China to understand both international
and domestic economic developments that may impact our footprint.
This includes active engagement with industry associations and regulators,
external affairs capability and collaborative partnerships with
government agencies.
China-based regulatory intelligence teams provide insight on any
changes in regulation that may impact us, and we partner closely with
local industry to ensure we are working within government-set parameters.
Activity impact for 2021
Execution of the Greater China operating model, strategic review of the
infant formula business, alongside continued delivery of China-centric
innovation, consumer centricity and close monitoring of global and regional
economic developments will help to maintain operating focus in China.
Target rating from current Red to realistically reduce to Amber by the end
of 2021, though further disruptions can be anticipated which could extend
this level of higher exposure.
 S T R AT E G I C R E P O R T G OV E R N A N CE
11. PEOPLE
Risk movement: Oversight accountability
Decreasing Executive ownership resides directly with the
Chief Human Resources Officer, who drives
activity through each of the Global Business
Unit executive leadership teams. Board
oversight is provided by the main Board.
The risk: Failure to achieve strategic objectives as a result of significant
management churn and inability to attract and retain top talent.
Potential impact
Disruption to business performance attributed to churn across senior
management positions and the risk of fatigue arising from a period of
sustained business change.
Mitigation progress in 2020
Following the launch of the Rejuvenating Sustainable Growth strategy, a
new leadership team is now in place and churn across senior management
has stabilised. An SVP HR has been appointed to each Global Business Unit
and the corporate centre.
We launched a Leadership Development and Talent Centre of
Excellence to deliver greater value to the business by identifying,
developing and scaling best practice HR processes that directly contribute
to the attraction, retention and development of our talent.
Current control strategy
Talent identification, mapping and calibration have been undertaken for
critical senior management positions, helping to optimise both talent
management and succession planning processes. Succession plans for
key management positions are in place and retention risk analysis is
undertaken regularly, including reviews of turnover rates. The Group’s
total compensation programmes and Employee Value Proposition (EVP)
are also subject to annual review.
A number of initiatives are under way to promote Reckitt as an
employer of choice. These include social impact and diversity and inclusion
(D&I) programmes, and employee wellbeing. We offer a suite of tools to
help Reckitt employees get the most out of their careers at Reckitt, from
learning and development, the annual performance review process and
Leadership Development programmes that focus on how managers can
inspire, empower and engage their teams.
Strategic workforce planning is in progress to understand the shape of
the workforce and how it will change over the next three years to facilitate
proactive intervention.
Activity impact for 2021
We will continue to focus on unleashing the potential of our people,
performance and purpose by attracting the best talent, developing
our people and enabling culture change, to shape and drive the future
workplace to deliver sustainable outperformance. Target rating to remain
Amber by the end of 2021.
Reckitt Annual Report and Accounts 2020
F I N A N C I A L S TAT E M E N T S
12. TAX DISPUTES
Risk movement: Oversight accountability
No change Executive ownership resides at corporate
directly with the Chief Financial Officer. Board
oversight is provided by the Audit Committee.
The risk: Significant unprovisioned cash outflows as a result of tax
authority challenge to filed tax positions in territories.
Potential impact
If our filing positions around transfer pricing are not considered in
any country to be compliant or our operating model is not sufficiently
communicated, implemented and embedded, both internally and
externally, tax authorities may successfully challenge our tax return
filings with a potentially significant financial impact on the Group.
Mitigation progress in 2020
Ongoing timely and robust responses to progress outstanding disputes
and continual monitoring of progression in relation to Advanced Pricing
Agreements (APAs) and subsequent operating model tax audits. Detailed
and thorough advice and technical support from advisors take place.
Provisions made at CHQ for anticipated exposures. The business
will continue to review the provisioning strategy over the next five years
in light of any expected changes.
Current control strategy
Ongoing review by Reckitt Tax, country FDs and external advisors with
central provisioning for anticipated exposures. Continuous monitoring of
information on EC State Aid investigations and possible application to
Reckitt. We monitor the impact of the Base Erosion and Profit Sharing
(BEPS) initiative and other law changes to identify possible adverse
impacts and put in place remedial strategies.
Activity impact for 2021
Timely and robust responses to progress outstanding disputes, continual
monitoring of progression in relation to APAs and subsequent operating
model tax audits, and increased prioritisation of projects and senior
management overview are expected to maintain this risk as Green for 2021.
Target rating to remain Green at the end of 2021.
89
 R I S K M A N AG E M E N T CO NT I N U ED
13. PRODUCT REGULATIONS 14. LEGAL & COMPLIANCE
Risk movement: Oversight accountability
Decreasing Executive ownership resides directly with the
Chief R&D Officer, who drives activity through
the Global Business Unit executive leadership
teams. Board oversight is provided by the
CRSEC Committee.
The risk: Non-compliance with product classification regulations,
guidelines, internal standards and/or registrations across the supply
chain and throughout the product lifecycle.
Potential impact
Non-compliance with a product related regulation may result in supply
disruption, increased regulatory scrutiny, financial impact (including product
recall), damage to company reputation and potential civil/criminal liability.
Regulations impacting our products across the portfolio are continually
evolving. If we do not anticipate these changes and are not ready to use
them to drive innovation and competitive advantage, we may see an
increase in costs and a loss of market share to competitors.
This risk is enhanced by the extensive range of product regulatory
classifications across the portfolio, emerging regulations in key markets and
fragmented IT systems lacking end-to-end integration.
Mitigation progress in 2020
A detailed review of the portfolio is ongoing with expected completion
in 2021. The programme reviews critical compliance elements of the
portfolio and covers all Global Business Units. The schedule follows a
risk-based approach.
Current control strategy
Multiple control programmes are in place to manage regulatory compliance
risks, including the Product Integrity Review (reviewing product compliance
with registration and/or regulatory requirements), REACh compliance
programme and updates to our company Core Datasheets.
Regulatory Intelligence processes and systems have been strengthened
and we have evolved how our regulatory KPIs are established, monitored
and reported.
The Risk, Sustainability & Compliance Committee (RSCC) structure
ensures KPIs are reported from the top to all levels in the organisation.
There is an appropriately resourced single system for consumer complaints
in place and specialist audit teams providing independent assurance.
Activity impact for 2021
The Product Lifecycle Management (PLM) programme will systematise our
product safety and compliance processes, aligning with the standards set
within the Product Integrity Review (PIR) and Product Safety Evaluation
Report (PSER) projects. PLM is due for completion in 2022. Review of the
end-to-end artwork and label approval process is also under way and is a
focus area for 2021.
Our Regulatory teams partner with external regulators to credibly
engage in regulation development and to assess the impact and
opportunities of future regulations to drive readiness, innovation and
competitive advantage. Target rating to remain Amber at the end of 2021.
This is a multi-year deliverable to replace current systems.
90 Reckitt Annual Report and Accounts 2020
Risk movement: Oversight accountability
No change Executive ownership resides with the General
Counsel & Company Secretary together with
the Chief Ethics & Compliance Officer, with
each Global Business Unit responsible for
their respective deliverables. Board oversight
is provided by a combination of the CRSEC
and Audit Committees to ensure full
and appropriate coverage of the
Compliance programme.
The risk: We are not fully compliant with relevant laws and regulations,
including anti-corruption laws, data privacy laws and global
competition laws.
Potential impact
Non-compliance with relevant laws and regulations may damage Reckitt’s
reputation, lead to significant potential fines and possible criminal liability
for Reckitt companies and/or senior management.
Stricter data privacy regulations in key markets, together with adoption
of new technology and our growing e-commerce business, have impacted
data handling practices across the Group. The COVID-19 pandemic has
seen an increase in competition law and anti-trust compliance risk as
we respond to a significant increase in demand for COVID-19 essential
products. The Nutrition business, combined with changes in the way we
interact with healthcare entities (HCEs) and healthcare professionals (HCPs)
due to COVID-19, has also increased exposure to anti-corruption laws.
Mitigation progress in 2020
The global Ethics & Compliance programme has been strengthened
through the implementation of extensive controls across key compliance
risk areas. For data privacy, this includes the establishment of a dedicated
e-commerce privacy function, completion of Privacy Impact Assessments
and adoption of stringent data protection safeguards across direct-to-
consumer channels.
Competition law risk and control assessments were completed in
key markets, with supporting mitigation plans agreed and implemented.
Our third-party bribery, Interaction with HCEs and HCPs, and Grants,
Donations & Charitable Contributions processes have evolved through
the introduction of an enhanced operating model supported by more
robust systems and procedures.
Current control strategy
SVP Legal now appointed into each Global Business Unit, with dedicated
Ethics & Compliance resources working alongside the Global Business
Units to roll out the Compliance programme across all key markets. The
programme of global compliance risk assessments will continue in 2021,
alongside implementation of new policies and procedures, allowing us
to effectively respond to any changes in the risk profile.
All employees are required to complete online Global Compliance
training modules, with refresher training deployed each year. Core modules
include Code of Conduct, anti-bribery, antitrust, data privacy and
separately product safety.
The Group-wide Speak Up hotline is operational, widely communicated
and reinforced through a robust, independent investigation process and
follow-up.
Activity impact for 2021
Continued advancement of the Ethics & Compliance programme through
targeted risk assessments, enhanced analytics and expansion of the
training programme will help to drive greater awareness of relevant laws
and regulations. Target rating to remain Amber at the end of 2021. This is
an ongoing and dynamic programme.
 S T R AT E G I C R E P O R T G OV E R N A N CE F I N A N C I A L S TAT E M E N T S

Emerging risks
15. SOUTH KOREA HUMIDIFIER The implementation of an effective

SANITISER (HS) risk management framework within an

organisation remains a cornerstone of
the corporate governance expectations
Risk movement: Oversight accountability
No change Executive ownership of the risk at a Group
level resides directly with the General Counsel
contained within the 2018 revisions to
& Company Secretary. Board oversight is the UK Corporate Governance Code.
provided by the main Board.
We have defined an emerging risk as an event that has the potential to
significantly impact Reckitt’s financial position, competitiveness and
reputation, specifically;
• When the nature and value of the impact is not yet fully known or
understood, giving the emerging nature of the risk; and/or
• With an increasing impact and probability over a longer time horizon
The South Korea Humidifier Sanitiser (HS) issue was a tragic event. The (i.e. five+ years)
Group continues to make both public and personal apologies to victims.
Category ID Risk title Risk statement
The risk: Financial and reputational risk as a result of the health issues
caused by consumers inhaling a humidifier sanitiser previously sold by 1 Geopolitical Increasing geopolitical volatility
Oxy, which Reckitt acquired in 2001. with the potential to destabilise
key markets and in some cases
Potential impact disrupt our operations. This
While a provision was made in 2016 to cover the initial government includes domestic political
classification rounds and certain other costs, the risk of additional exposure developments, regional tensions,
remains. An amendment made to the HS Special Law in 2020 may lead to
Strategic

the impact of Brexit, fluctuations

an increased volume of civil claims against Reckitt Benckiser Korea (RBK). in oil prices and changes to local
The South Korean Government has now recognised asthma, toxic hepatitis regulations impacting imports and
and children’s interstitial lung disease as HS injuries and there is potential exports.
further expansion of liability as the new amendment to the law reduces the
2 Sustained/ Risk of sustained/deepening
burden of proof to establish that injury or illness is caused by HS exposure.
deepening recession or financial crisis as a
Further, under the law amendment, RBK may be required to make additional
economic result of the slowdown in many
contributions to the Industry Relief Fund (IRF).
recession global economies caused by the
Mitigation progress in 2020 COVID-19 pandemic.
RBK has continued to work with the government, victims and other
3 Pandemic- As a result of the COVID-19
businesses to progress settlement with claimants via its Compensation pandemic, applicable laws and
related litigation
Plan, and address legal claims, as well as to restore trust among consumers regulations will be enacted, or
and regulation
in South Korea. RBK also made comments on the issues with the HS law existing ones changed, in a way
Operational

amendment during the legislative process and has made clear to the that may significantly impact
Korean Government that it is dependent on the Reckitt Group as its Reckitt’s business and at a speed
shareholder for all funding. that makes it difficult to comply,
Current control strategy thereby potentially exposing
Full public apology formally and repeatedly made by RBK to affected Reckitt to new litigation e.g.
parties. Regular review meetings continue with the Group, to monitor related to supply and product
issues as they arise. The Group provides liquidity to RBK on a tightly liability issues.
managed basis. It has encouraged RBK to seek a broader resolution
involving all responsible parties on a basis that provides fair compensation
to legitimate victims, with each responsible party contributing its fair share.
The Group is considering a number of options for the future in light of the
amended law.

Activity impact for 2021

The Group will continue to encourage RBK to seek a broader resolution
and will continue to evaluate options to do the right thing while limiting
liability to fund compensation payments which are not anchored in proper
standards of legal and scientific proof. Target rating likely to remain Amber
until the South Korea Government closes the matter.

Reckitt Annual Report and Accounts 2020 91

 R I S K M A N AG E M E N T CO NT I N U ED

2. Sustained/deepening economic recession

Pandemic-related The risk: Risk of sustained/deepening recession or financial crisis
litigation as a result of the slowdown in many global economies caused by
and regulation the COVID-19 pandemic.

Potential impact
The commercial teams closely monitor the economic trends and plan
commercial strategies to optimise our business appropriately. Whilst we
cannot fully protect our business from recessionary pressures, we take
Speed of impact

appropriate measures to maximise and protect our business during

economic downturns.

Mitigation
Key mitigations include portfolio rightsizing and review of pricing guidelines,
adapting our channel strategy with disruptive value offerings and the
acceleration of the e-commerce portfolio, ensuring we carefully balance
Sustained/deepening
economic recession price and volume-led growth through targeted costing programmes,
maintaining prudent financial risk management through clear ROI metrics
for large investments and accurate forecasting and cash flow management.
Geopolitical

3. Pandemic-related litigation and regulation

The risk: As a result of the COVID-19 pandemic, applicable laws and
regulations will be enacted, or existing ones changed, in a way that may
Probability significantly impact Reckitt’s business and at a speed that makes it
difficult to comply, thereby potentially exposing Reckitt to new
litigation e.g. related to supply and product liability issues.

Potential impact
The materialisation of the risk could result in damage to Reckitt’s
reputation, interference in Reckitt’s operations, fines and financial liability
to third parties.
Low financial Moderate Significant
impact financial impact financial impact Mitigation
Our Legal function participates in GBU, regional and market level COVID-19
related meetings. Processes have been implemented to review and manage
ongoing major litigation, including input from regional legal teams into the
1. Geopolitical Group litigation report. The implementation of our compliance programme
is ongoing, and the Group’s COVID-19 risk assessment process provides
The risk: Increasing geopolitical volatility with the potential to
visibility and reporting of COVID-19 related risks across the business.
destabilise key markets and in some cases disrupt our operations.
This includes domestic political developments, regional tensions,
the impact of Brexit, fluctuations in oil prices and changes to local
regulations impacting imports and exports.

Potential impact
The potential impacts of any geopolitical volatility are wide ranging and
include decreasing sales and revenue, fluctuations in corporate finance
and treasury, and fewer opportunities for strategic growth. As we operate
across a large global network, geopolitical instability can also impact our
supply chain operations, workforce management practices and the
safeguarding of our data and intellectual property.

Mitigation
We continue to closely monitor the global geopolitical climate to ensure we
understand any developments and how they have the potential to impact
our business. Key measures include monitoring and analysis of any political
or regulatory uncertainty through our External Affairs network, engagement
of advisors in critical markets and identification of security threats facing
the business through the Corporate Security programme.

92 Reckitt Annual Report and Accounts 2020

 S T R AT E G I C R E P O R T G OV E R N A N CE F I N A N C I A L S TAT E M E N T S

V I A B I L I T Y S TAT E M E N T

The assessment process and key assumptions Viability Statement

The Board’s Viability Review is based on the Group’s strategy, its long
term financial plan and its principal risks. A financial forecast covering a
five-year period was prepared (the “base case”). This period was selected
as it is the period covered in the Group’s long-term forecasting process,
based on the 2021 budget and projections for the following years, and
covers the introduction to market of the current new product pipeline.
The financial forecast is based on a number of key assumptions
aligned to the Group’s growth strategy, planned capital spending and
capital allocation policy. The assessment of viability takes into account
the Group’s cash flow, its currently available banking facilities and
interest cover ratios in relevant financial covenants, and does not assume
the raising of additional new debt or equity finance. If Reckitt performs
in line with the base case forecasts, it would have sufficient funds to
trade, settle its liabilities as they fall due, and remain compliant with
financial covenants.
The Board believes that the Group is well-positioned to manage its
principal risks successfully. The Board’s belief is based on consideration
of the historic resilience of Reckitt and has taken account of its current
position and prospects, the actions taken to manage the Group’s debt
profile, risk appetite and the principal risks facing the business in
unexpected and adverse circumstances.
As a result of the Viability Review, the Board has a reasonable
expectation that the Group will be able to continue in operation and
meet its liabilities as they fall due over the five-year period covered in
the Viability Review.

Assessment of principal risks and viability

To further test the robustness of the base case forecast, further analyses
were prepared to consider the viability of the business in the event of
adverse unexpected circumstances. Such adverse circumstances were
modelled primarily upon the crystallisation of the Group’s principal risks
(see pages 84 to 91, including mitigation and control strategies).
Principal risks have the potential to create adverse circumstances for
the Group and can occur individually or in combination with each other.
The assessment of viability considered the implications of crystallisation
of each principal risk, assigning each an estimated annual monetary value
and estimating the impact on interest cover ratios and headroom over
available borrowing facilities.
These principal risks were aggregated to create two scenarios which
model plausible downside scenarios of increasing severity based on: (i)
crystallisation of principal risks deemed to have the most relevant
potential impact on viability (see risks marked ‘1’ on page 82); and (ii)
crystallisation of all principal risks and the impact of adverse movements
in foreign exchange and interest rates. The analysis indicated that even
with unexpected events occurring immediately and in combination,
Reckitt would still have sufficient funds to trade, settle its liabilities as
they fall due, and remain compliant with financial covenants.
The Board has further considered the occurrence of a Black Swan
event: an event of greater adversity than those modelled above, with
sufficient potential impact to risk the future of Reckitt as a strong and
independent business operating in its chosen markets. The occurrence
of a major issue could result in significant reputational impact, a The Strategic Report, as set out on pages 1 to 93, has been approved by
substantial share price fall, significant loss of consumer confidence, and the Board.
the inability to retain and recruit quality people. Such an event could
have an impact on the viability of the business. On the basis of a On behalf of the Board
comprehensive set of mitigating controls in place across the business,
considering the unknown nature of a Black Swan event and that its Rupert Bondy
occurrence is considered highly unlikely, it has not been included in the Company Secretary
Viability Review. Reckitt Benckiser Group plc
15 March 2021

Reckitt Annual Report and Accounts 2020 93

 O U R B OA R D O F D I R E C TO RS

The Board consists of a balance of Executive and

Non-Executive Directors who together have collective
accountability to Reckitt’s shareholders and stakeholders.

Chris Sinclair Laxman Narasimhan Jeff Carr

Chairman of the Board Chief Executive Officer Chief Financial Officer

Andrew Bonfield Olivier Bohuon Nicandro Durante

Non-Executive Director Non-Executive Director Senior Independent Director

Margherita Della Valle Mary Harris Mehmood Khan

Non-Executive Director Non-Executive Director Non-Executive Director

Pam Kirby Sara Mathew Elane Stock

Non-Executive Director Non-Executive Director Non-Executive Director

94 Reckitt Annual Report and Accounts 2020

 S T R AT E G I C R E P O R T G OV E R N A N CE F I N A N C I A L S TAT E M E N T S

Directors as at 31 December 2020 Length of tenure as at 31 December 2020

0–3 years 7
3-6 years 0
Male 6 6–9 years 4
Female 5 9+ years 0

Nationality as at 31 December 2020 Ethnic diversity as at 31 December 2020

British 3
American 4
British/Dutch 1
American/British 1
Brazilian/Italian 1 Ethnic minority group 3
Italian/British 1 Non-ethnic minority group 8

Chris Sinclair  N R C Laxman Narasimhan  N

Chairman of the Board Chief Executive Officer

Nationality Board tenure Nationality Board tenure

American 6 years, 2 months American 1 year, 9 months

Appointment
Appointed as a Non-Executive Director in February 2015 and as Chairman of the
Board in May 2018.
Career
Chris is the former Chair and CEO of Mattel, Inc. Previously, he served as CEO for
various private-equity backed companies, including Caribiner International and
Quality Food Centers (now part of the Kroger Co.). Earlier in his career, Chris held a
number of senior positions at PepsiCo, including Chair and CEO of Pepsi-Cola Co.
(worldwide beverages), and CEO of PepsiCo Foods and Beverages International. He
was also a Director of Foot Locker, Inc. and Perdue Farms, Inc.
Chris graduated with a degree in Marketing from the University of Kansas and
received an MBA from the Tuck School of Business at Dartmouth College.
Skills and experience
Chris brings strong leadership skills and valuable strategic insight to the Board,
through his experience as CEO and Chair of other large companies. He also has a
strong understanding of international consumer-focused businesses.
Current external appointments
None
Key
Appointment
Appointed as CEO-Designate in July 2019 and as CEO on 1 September 2019.
Career
Prior to joining Reckitt, Laxman held various senior roles at PepsiCo from 2012 to
2019, including Global Chief Commercial Officer, Chief Executive Officer of Latin
America, Europe and Sub-Saharan Africa operations – where he ran PepsiCo’s food
and beverage businesses across the regions – and Chief Executive Officer of Latin
America. Prior to PepsiCo, Laxman served as a Director of McKinsey & Company
and held various roles from 1993 to 2012. He was also an Advisory Board member
of the Jay H. Baker Retailing Center at The Wharton School of The University of
Pennsylvania.
Laxman holds a degree in Mechanical Engineering from the College of Engineering,
University of Pune, India. He has a Masters degree in German and International
Studies from The Lauder Institute at The University of Pennsylvania and an MBA in
Finance from The Wharton School of The University of Pennsylvania.
Skills and experience
Laxman is an outstanding leader who brings wide experience across the consumer
goods sector, both operationally and at scale. Laxman has exceptional strategic
capabilities and consumer insight with a proven track record of developing
purpose-led brands and driving consumer-centric and digital innovation. He has
previously advised global organisations, led complex operational businesses and
inspired teams across developed and emerging markets to achieve market-leading
performance. This, combined with his excellent people engagement and
leadership skills, makes him well qualified for the role.

Chair Current external appointments

Trustee of Brookings Institution
R Remuneration
Member of the Council on Foreign Relations
N Nomination

A Audit

C C
 orporate Responsibility, Sustainability, Ethics and Compliance

Reckitt Annual Report and Accounts 2020 95

 O U R B OA R D O F D I R E C TO RS CO N T I N U E D
Jeff Carr 
Chief Financial Officer
Nationality Board tenure
British 1 year
Appointment
Appointed as Chief Financial Officer on 9 April 2020.
Career
Prior to joining Reckitt, Jeff was Chief Financial Officer and Management Board
member at Ahold Delhaize, the Dutch retailer operating across Europe and the USA.
Before joining Ahold Delhaize Jeff held the role of Chief Financial Officer at First
Group plc and easyJet plc and held senior finance roles at Associated British Foods
plc and Reckitt. Jeff started his career as a graduate trainee at Unilever plc.
Jeff holds a degree in Chemical Engineering from the University of Exeter and is a
Chartered Management Accountant.
Skills and experience
Jeff brings extensive experience across consumer and retail companies and is also
an alumnus of Reckitt. Jeff has a record of transformational strategic and
operational leadership, consistent performance delivery, strong capital allocation
discipline and building strong teams; all of which lead to longer-term shareholder
value creation.
Current external appointments
Chairman of the Audit Committee and Non-Executive Director of Kingfisher plc
Olivier Bohuon  R
Non-Executive Director
Nationality Board tenure
French 3 months
Appointment
Appointed as a Non-Executive Director in January 2021.
Career
Olivier was CEO of FTSE 100 medical devices company Smith & Nephew plc
from 2011 to 2018. Prior to that, he served as CEO of healthcare, cosmetology and
pharmaceutical company Laboratoires Pierre Fabre from 2010 to 2011, and from
2003 to 2010 he worked at Abbott Laboratories, rising to Corporate Executive Vice
President and President of the pharmaceutical products division. Earlier in his career,
Olivier worked at GlaxoSmithKline plc in positions of increasing seniority. He also
served on the Board of Smiths Group plc from July 2018 to November 2020. Olivier
became a Knight of the Legion of Honour in 2007. Olivier has a doctorate in Pharmacy
from the University of Paris-Sud and an MBA from HEC business school in Paris.
Skills and competencies
Olivier is a successful leader, with many years’ experience as CEO of a large, global
company. Olivier has a wealth of experience in healthcare products and markets
and brings great insight to the Board.
Current external appointments
Chairman of LEO Pharma
External Director of Takeda Pharmaceutical Company Limited
External Director of Virbac SA
Co-Founder and Board member of AlgoTherapeutix SAS
96 Reckitt Annual Report and Accounts 2020
Andrew Bonfield  A N
Non-Executive Director
Chair of Audit Committee
Nationality Board tenure
British 2 years, 9 months
Appointment
Appointed as a Non-Executive Director in July 2018 and as Chair of the Audit
Committee in January 2019.
Career
Andrew has been Chief Financial Officer of Caterpillar Inc. since September 2018.
He was previously Group CFO of National Grid plc from 2010 to 2018. Prior to this,
he held the position of Chief Financial Officer at Cadbury plc and also served
as Executive Vice President & Chief Financial Officer at Bristol-Myers Squibb.
Andrew is a Chartered Accountant and holds a Bachelor of Commerce degree
from the University of KwaZulu-Natal in Durban, South Africa.
Skills and competencies
Andrew brings more than three decades of financial expertise to the Board. He is
a strong leader, with experience gained in large, complex organisations and has a
history of driving strong financial performance in the UK and globally. These skills
are valuable to the Board and to his role as Chair of the Audit Committee.
Current external appointments
Chief Financial Officer of Caterpillar Inc.
Margherita Della Valle  A
Non-Executive Director
Nationality Board tenure
Italian/British 9 months
Appointment
Appointed as a Non-Executive Director in July 2020.
Career
Margherita has been Chief Financial Officer of Vodafone Group Plc since July 2018.
She also runs Vodafone Shared Services, which was established in 2011 to optimise
quality and efficiency across Vodafone’s customer, technology, finance and HR
operations. Prior to her current role, Margherita was Deputy Chief Financial Officer
of Vodafone, between 2015 and 2018, having held a number of senior positions in
finance beforehand, including Group Financial Controller and Chief Financial Officer
of Vodafone’s Europe region. Earlier in her career, she joined Omnitel Pronto Italia,
which became Vodafone Italy in 1994, and held various consumer marketing
positions in data analytics and consumer base management. From 2004 to 2007,
she was Chief Financial Officer of Vodafone Italy.
Margherita holds a Masters degree in Economics from Bocconi University in Italy.
Skills and competencies
Margherita has extensive experience of financial markets and digital technologies.
She is deeply experienced in business in both developed and developing markets,
bringing great insight to the Board. These skills, together with her strong leadership
background, are valuable to the Board and her membership of the Audit Committee.
Current external appointments
Chief Financial Officer of Vodafone Group Plc
 S T R AT E G I C R E P O R T G OV E R N A N CE
Nicandro Durante  N R
Senior Independent Director
Nationality Board tenure
Brazilian/Italian 7 years, 4 months
Appointment
Appointed as a Non-Executive Director in December 2013 and as Senior
Independent Director in January 2019.
Career
Nicandro started his career working in finance in Brazil and joined British American
Tobacco plc (BAT) in 1981. Whilst at BAT, Nicandro worked in the UK, Hong Kong and
Brazil and held a number of senior positions including Regional Director for Africa
and the Middle East, Chief Operating Officer and, from 2011 to 2019, as Chief
Executive Officer.
Nicandro holds a degree in Business Administration from the Pontifical Catholic
University of São Paulo, Brazil, and has obtained postgraduate qualifications in
Finance and Economics.
Skills and competencies
Nicandro has strong leadership skills, developed in various senior positions held
throughout his career. He has a strong background in the consumer goods industry
and has strong international business experience, bringing a global perspective to
his role.
Current external appointments
Chairman of TIM Participações S.A. and Chair of the ESG Committee
Mary Harris  R N
Non-Executive Director
Designated Non-Executive Director for engagement with the company’s
workforce
Chair of Remuneration Committee
Nationality Board tenure
British/Dutch 6 years, 2 months
Appointment
Appointed as a Non-Executive Director in February 2015, as Chair of the
Remuneration Committee in November 2017 and as Designated Non-Executive
Director for engagement with the company’s workforce in July 2019.
Career
Mary is currently a Non-Executive Director of ITV plc, where she is also a member
of the Audit and Risk Committee, the Nominations Committee and Chair of the
Remuneration Committee. She is also a member of the Remuneration Committee
of St. Hilda’s College, Oxford and a Supervisory Director of HAL Holding N.V. Mary
was previously a Partner at McKinsey & Company. She also held the position of
Member of the Supervisory Board of TNT NV, Scotch and Soda NV and TNT Express
NV and was Vice-Chair of the Supervisory Board and Chair of the Remuneration
Committee of Unibail-Rodamco-Westfield S.E. She was formerly a Non-Executive
Director and Chair of the Remuneration Committee of J Sainsbury plc.
Mary graduated from the University of Oxford with a Masters degree in Politics,
Philosophy and Economics and completed her MBA at Harvard Business School.
Skills and competencies
Mary has substantial experience in consumer and retail businesses across
China, Southeast Asia and Europe. She brings to the Board a top-level strategic
outlook, with international and consumer focus. Her previous experience in other
Non-Executive Director roles, and as Chair of other Remuneration Committees,
is invaluable in allowing her to effectively Chair the Remuneration Committee.
Current external appointments
Non-Executive Director of ITV plc
Member of the Remuneration Committee of St. Hilda’s College, Oxford University
Member of the Supervisory Board of HAL Holding N.V.
Reckitt Annual Report and Accounts 2020
F I N A N C I A L S TAT E M E N T S
C Mehmood Khan  C
Non-Executive Director
Nationality Board tenure
American/British 2 years, 9 months
Appointment
Appointed as a Non-Executive Director in July 2018.
Career
Mehmood has been Chief Executive Officer of Life Biosciences Inc. since April 2019.
He was previously Vice Chairman and Chief Scientific Officer, Global Research and
Development, at PepsiCo Inc. Mehmood previously held the position of President,
Global Research & Development Centre at Takeda Pharmaceutical Company
Limited. He was a faculty member at the Mayo Clinic and Mayo Medical School in
Rochester, Minnesota, serving as Consultant Endocrinologist and Director of the
Diabetes, Endocrine and Nutritional Trials Unit in the endocrinology division.
Mehmood has a Medical degree from the University of Liverpool, is a Fellow of the
Royal College of Physicians, London and of the American College of Endocrinology
and holds two Honorary PhDs in Humanities and International Law.
Skills and competencies
Mehmood is a highly skilled medical practitioner and researcher. He brings to the
Board extensive experience in both developing and developed markets, adding
value to the CRSEC Committee through his knowledge of creating sustainable
initiatives and past experiences of leading research and development efforts to
create breakthrough innovations.
Current external appointments
CEO of Life Biosciences Inc.
Pam Kirby  C N A
Non-Executive Director
Chair of CRSEC Committee
Nationality Board tenure
British 6 years, 2 months
Appointment
Appointed as a Non-Executive Director in February 2015 and as Chair of the CRSEC
Committee in July 2016.
Career
Pam served as Chairman of SCYNEXIS, Inc. until June 2015. She was formerly CEO
of Quintiles Transnational Corporation and held senior positions in the international
healthcare industry at AstraZeneca plc and Hoffman-La Roche. Pam holds a
first-class BSc honours degree and a PhD in Clinical Pharmacology from the
University of London.
Skills and competencies
Pam brings to the Board extensive knowledge of the healthcare sector and a
wealth of international business and pharmaceutical experience. These skills are
highly valuable to her role as Chair of the CRSEC Committee.
Current external appointments
Non-Executive Director of DCC plc
Non-Executive Director of Hikma Pharmaceuticals plc
Member of the Supervisory Board of AkzoNobel N.V.
Honorary Professor King’s College London and Member of the Board of King’s
Health Partners
97
 O U R B OA R D O F D I R E C TO RS CO N T I N U E D

Other Directors who served during the year

Sara Mathew  A
Non-Executive Director Adrian Hennah
Adrian joined Reckitt as Chief Financial Officer in February 2013. Adrian retired as
Chief Financial Officer on 9 April 2020.
Nationality Board tenure
American 1 year, 9 months Warren Tucker
Warren joined Reckitt as a Non-Executive Director in February 2010. Warren
Appointment stepped down from the Board and Audit Committee on 12 May 2020.
Appointed as a Non-Executive Director in July 2019.

Career
Board members skills overview
Sara was previously Chair and Chief Executive Officer of Dun & Bradstreet. In this
role, she led the transformation of the company into an innovative digital enterprise.
Prior to her role as Chair and Chief Executive Officer, she also served as President
and Chief Operating Officer, and Chief Financial Officer where she initiated and Financial expertise Strategy
managed the redesign of the company’s accounting processes and controls. Prior
to her career at Dun & Bradstreet, Sara spent 18 years at Procter & Gamble serving 6 12
as CFO of the Baby Care and Pamper Products businesses and Vice President of
Finance in Asia. Previously, she served on the boards of Shire Pharmaceuticals
Limited, Campbell Soup company and Avon.

Sara received her undergraduate degree from the University of Madras in Chennai, India
and holds an MBA in Marketing and Finance from Xavier University in Cincinnati, Ohio.
6
Skills and competencies
Sara has extensive Board experience across a number of industries including
Consumer goods & retail Healthcare & pharmaceuticals
healthcare, consumer products and financial services. She has experience with
consumer goods products and digital technologies and has led strategic and digital
transformations. She has a proven track record of adding significant strategic value 2 6
and brings great insight to the Board through her previous positions and
demonstrates valuable leadership qualities. 10

Current external appointments

Chair of Freddie Mac
6
Director of State Street Corporation

Director of NextGen Acquisition Corporation

Leadership With skill
Without skill
Elane Stock  R 12
Non-Executive Director

Nationality Board tenure

American 2 year, 7 months

Appointment
Appointed as a Non-Executive Director in September 2018.

Career
Elane has been Chief Executive Officer of ServiceMaster Brands since October
2020. Elane was previously Group President at Kimberly-Clark International where
she was responsible for business operations in EMEA, Asia Pacific and Latin
America. Prior to this, Elane was Global President at Kimberly-Clark Professional
with responsibility for the division selling workplace hygiene and safety products.
She has also held the position of Director at Equifax Inc. In her earlier career, Elane
was a Partner at McKinsey & Company in the US and Ireland.

Elane holds a BA in Political Science from the University of Illinois and an MBA in
Finance from The Wharton School of The University of Pennsylvania.

Skills and competencies

Elane brings great sector-relevant experience and insight of consumer goods
products to the Board, particularly in personal care and wellness. She also brings
vast knowledge of emerging markets and the changing channels of trade and
consumer preferences.

Current external appointments

Chief Executive Officer of ServiceMaster Brands

Director of Yum! Brands, Inc.

98 Reckitt Annual Report and Accounts 2020

 S T R AT E G I C R E P O R T
Laxman Narasimhan 
Chief Executive Officer
Kris Licht 
President Health & Chief Customer
Officer
Aditya Sehgal 
President Nutrition, eRB
& Greater China
Miguel Veiga-Pestana 
Head of Corporate Affairs & Chief
Sustainability Officer
Volker Kuhn 
Chief Transformation Officer
Rupert Bondy
General Counsel & Company
Secretary
G OV E R N A N CE F I N A N C I A L S TAT E M E N T S
G R O U P E X ECU T I V E CO M M IT T E E
Laxman Narasimhan  01
Chief Executive Officer
Nationality Company tenure
American 1 year, 9 months
Experience
01 Jeff Carr  02
Laxman joined Reckitt as CEO-Designate in July 2019 and was appointed as CEO
Chief Financial Officer
on 1 September 2019. Prior to joining Reckitt, Laxman held various senior roles at
PepsiCo from 2012 to 2019, including, Global Chief Commercial Officer, Chief
Executive Officer of Latin America, Europe and Sub-Saharan Africa operations –
where he ran the company’s food and beverage businesses across the regions –
and Chief Executive Officer of Latin America. Prior to PepsiCo, Laxman served as a
Director of McKinsey & Company and held various roles from 1993 to 2012. He was
also an Advisory Board member of the Jay H. Baker Retailing Center at The Wharton
School of The University of Pennsylvania.
Laxman holds a degree in Mechanical Engineering from the College of Engineering,
University of Pune, India. He has a Masters degree in German and International Studies
03 Harold van den Broek  04 from The Lauder Institute at The University of Pennsylvania and an MBA in Finance
President Hygiene from The Wharton School of The University of Pennsylvania. Laxman is an outstanding
leader who brings wide experience across the consumer goods sector. He has
previously led complex operational businesses and inspired teams across developed
and emerging markets to achieve market-leading performance. He has exceptional
strategic capabilities and consumer insight with a proven track record of developing
purpose-led brands and driving consumer-centric digital innovation.
Jeff Carr  02
Chief Financial Officer
05 Ranjay Radhakrishnan 06 Nationality Company tenure
Chief Human Resources Officer British 1 year
Experience
Jeff joined Reckitt as Chief Financial Officer on 9 April 2020. Prior to joining Reckitt,
Jeff was Chief Financial Officer and Management Board member at Ahold Delhaize,
the Dutch retailer operating across Europe and the USA. Before joining Ahold
Delhaize, Jeff held the role of Chief Financial Officer at First Group plc and easyJet
plc and held senior finance roles at Associated British Foods plc and Reckitt. Jeff
started his career as a graduate trainee at Unilever plc. Jeff is currently Chairman of
the Audit Committee and Non-Executive Director of Kingfisher plc. Jeff holds a
degree in Chemical Engineering from the University of Exeter and is a Chartered
07 Sami Naffakh  08 Management Accountant.
Chief Supply Officer Jeff brings extensive experience across consumer and retail companies. He has a
strong track record of transformational strategic and operational leadership,
consistent performance delivery, strong capital allocation discipline and building
strong teams.
Kris Licht  03
President Health & Chief Customer Officer
Nationality Company tenure
09 American 1 year, 5 months
Angela Naef  10
Chief R&D Officer Experience
Kris joined Reckitt in November 2019 as Chief Transformation Officer. On 1 July 2020,
Kris became President Health & Chief Customer Officer. Prior to joining Reckitt, Kris
held a number of senior strategic and operational positions at PepsiCo. Previously,
he served as Division President in PepsiCo’s North American Beverage Business.
Prior to this, Kris was a Partner at McKinsey & Company working for over 12 years in
the firm’s consumer, health and retail practices. Kris brings strong operational and
strategic experience to the Committee.
11 Filippo Catalano 12
Chief Information & Digitisation
Officer
Reckitt Annual Report and Accounts 2020 99
 G R O U P E X ECU T I V E CO M M IT T E E CO N T I N U ED
Harold van den Broek  04
President Hygiene
Nationality Company tenure
Dutch 7 years
Experience
Harold joined Reckitt in 2014. He was appointed Chief Operating Officer for the
Hygiene Home business unit in December 2019, with responsibility for the overall
management of the business unit. On 1 July 2020, Harold became President
Hygiene. Before his current role, Harold was the CFO of the Hygiene Home business
unit, a position he had held since the formation of the business unit in January 2018.
Prior to joining Reckitt, Harold worked at Unilever, where he started his career.
During his tenure there, he held many senior financial positions spanning categories
in developed and emerging markets and corporate roles. Harold is an impressive
leader, known for inspiring teams to deliver growth, with operational rigour. Harold
will leave Reckitt on 31 May 2021.
Aditya Sehgal  05
President Nutrition, eRB & Greater China
Nationality Company tenure
Indian 26 years
Experience
Aditya joined Reckitt in 1994. After holding various roles in sales, marketing and
general management, he was appointed SVP North Asia in 2012 and in 2015 he
was promoted to Global Category Officer Health. In 2017, Aditya became EVP
Infant & Child Nutrition (IFCN) with responsibility for leading the onboarding of
Mead Johnson into Reckitt and the integration of the IFCN division into Health.
In January 2018, he was appointed EVP Health for Developing Markets and
e-commerce. Aditya became Chief Operating Officer, Health in January 2019,
with responsibility for the global operations of the Health and Nutrition business
unit. On 1 July 2020, he became President Nutrition, eRB & Greater China. In this role,
he leads the Nutrition Global Business Unit. He also leads Reckitt’s eRB business
(global e-commerce, digital marketing/CRM and venture/partnerships) and the
China business across all three Global Business Units. Aditya is a highly skilled
leader, known for delivering superior results; he has played a fundamental role
in the growth of the Reckitt business in China, whilst driving transformation and
operational excellence in the field of e-commerce.
Ranjay Radhakrishnan  06
Chief Human Resources Officer
Nationality Company tenure
Indian 1 year, 1 month
Experience
Ranjay Radhakrishnan joined Reckitt as Chief Human Resources Officer on 1 March
2020. Ranjay has 28 years’ experience in the human resources function across
different geographies and industries. Prior to joining Reckitt, Ranjay was the Chief
Human Resources Officer at InterContinental Hotels Group plc, one of the world’s
leading hotel companies. Previously, Ranjay spent over two decades at Unilever, in a
range of senior leadership roles at global, regional and country levels. His last role at
Unilever was Executive Vice President Global HR, where he led HR for Unilever’s
eight regions and four global product categories, under a unified global HR
leadership role.
Ranjay has worked in a number of specialist areas of HR such as talent, learning,
reward, change and organisational effectiveness, complementing large generalist
roles in both mature and developing markets. Ranjay has worked and lived in
several countries, including the UK, The Netherlands, Singapore, the UAE and India.
He graduated from Mumbai University in Commerce and Accounting and has a
Master’s degree in Personnel Management and Industrial Relations from the Tata
Institute of Social Sciences in Mumbai, India.
100 Reckitt Annual Report and Accounts 2020
Miguel Veiga-Pestana  07
Head of Corporate Affairs & Chief Sustainability Officer
Nationality Company tenure
British 4 years
Experience
Miguel joined Reckitt as the Head of Corporate Affairs in 2017, responsible for all
aspects of strategic communications, brand and reputation management. He
was subsequently appointed as Chief Sustainability Officer in 2018 responsible
for overseeing the development and integration of Reckitt’s sustainability and
purpose-led agenda. He became Head of Corporate Affairs & Chief Sustainability
Officer and a member of the Group Executive Committee in April 2020.
Prior to joining Reckitt, Miguel was Chief Communications Officer at the Bill &
Melinda Gates Foundation, based in Seattle. Previously, Miguel spent over a decade
at Unilever and held several regional and global communications roles, notably as
the Vice-President for Global Sustainability Strategy and Advocacy. Miguel has
more than 30 years’ external affairs, communications and sustainability experience,
having held positions in the UK, US and Brussels. He was born on the island of
Madeira and is of Portuguese descent.
Sami Naffakh  08
Chief Supply Officer
Nationality Company tenure
French 9 months
Experience
Sami joined Reckitt as Chief Supply Officer on 1 July 2020 and is responsible for
Reckitt’s global supply chain operations, and since January 2021 he has also been
responsible for Reckitt’s Quality and Environmental Health & Safety (EHS)/Quality
Compliance teams.
Sami brings to Reckitt over 25 years of broad international leadership experience
in fast-moving consumer goods companies such as Unilever, Danone and Estée
Lauder – as well as Reckitt, where he previously held several leadership positions
from 2003 to 2009. Most recently, Sami was Executive Vice President at Arla Foods,
the Danish farmer-owned dairy cooperative, where he headed up supply chain
operations globally. Sami is skilled in leading major transformations of supply chain
operations, increasing competitiveness, agility and sustainability to quickly adapt to
evolving consumer trends and customer requirements.
Volker Kuhn  09
Chief Transformation Officer
Nationality Company tenure
German 8 months
Experience
Volker joined Reckitt as Chief Transformation Officer on 1 August 2020 and is
responsible for driving productivity, new business solutions, strategy and further
growth opportunities.
Volker joined from Procter & Gamble (P&G) where he was VP Fabric Care, Europe
and Global Platform lead for single-dose detergents. He spent 26 years at P&G in a
range of international finance, brand marketing, business development and general
management roles. Volker has a strong track record of leading successful business
turnarounds, growth initiatives and transformations including the carve-out and
divestiture of the Duracell company from P&G to Berkshire Hathaway. He started
his career at Deutsche Bank and subsequently worked for a small consulting firm
before joining P&G. Volker currently serves as Chairman and a Non-Executive Board
member of FRoSTA AG, a leading European frozen food company.
Volker will become President, Hygiene on 1 May 2021.
 S T R AT E G I C R E P O R T G OV E R N A N CE F I N A N C I A L S TAT E M E N T S

Other Group Executive Committee members who served in the year

Angela Naef 10
Chief R&D Officer Zephanie Jordan
Chief SQRC Officer, joined Reckitt in 2015 and stepped down from the Group
Nationality Company tenure Executive Committee on 1 January 2021. Zephanie will leave Reckitt in April 2021.
American 7 months Adrian Hennah
Chief Financial Officer, joined Reckitt in January 2013 and stepped down from the
Experience Board on 9 April 2020. Adrian retired from the business on 21 October 2020.
Angela joined Reckitt as Chief R&D Officer on 14 September 2020. Angela is
responsible for elevating Reckitt’s science capability and platforms as well as for Gurveen Singh
driving external partnerships, including amplifying the Reckitt Global Hygiene Chief Human Resources Officer, joined Reckitt in 1993 and retired in June 2020.
Institute. Since January 2021, she had also taken responsibility for Global Regulatory
and Global Safety Assurance and SQRC (safety, quality and regulatory compliance) Rob de Groot
Operational Excellence teams. President, Hygiene Home, retired from Reckitt in February 2020.

Angela brings to Reckitt over 20 years of diverse senior leadership experience in Mike Duijser
product and business development roles. Most recently, Angela spent 10 years at Chief Supply Officer, joined Reckitt in November 2018 and left in January 2020.
DuPont, in various technical and commercial leadership roles, where she led the
Nutrition & Biosciences Global Technology and Innovation organisation. Angela has
a strong track record of accelerating innovation in the areas of food and nutrition
sciences, materials, health and clinical sciences, regulatory and biotechnology. She
is a passionate advocate for diversity and inclusion and actively works on STEM
education to inspire the next generation of new engineers and scientists. Angela is
a graduate of the University of California, Davis with a PhD in Physical Chemistry and
is a Lean Six Sigma Black Belt.

Rupert Bondy  11
General Counsel & Company Secretary

Nationality Company tenure

British 4 years, 4 months

Experience
Rupert joined Reckitt as General Counsel & Company Secretary in January 2017 and
is responsible for legal matters across the Group. He began his career as a lawyer in
private practice. In 1989 he joined US law firm Morrison & Foerster, working in San
Francisco and London, and from 1994 he worked for Lovells in London. In 1995 he
joined SmithKline Beecham as Senior Counsel for mergers and acquisitions and
other corporate matters. When SmithKline Beecham and Glaxo Wellcome merged
to form GlaxoSmithKline plc, Rupert was appointed Senior Vice President and
General Counsel. In 2008, Rupert became Group General Counsel of BP plc, holding
that position until he joined Reckitt. Rupert is a seasoned general counsel with
extensive experience across a number of sectors, including consumer healthcare.

Filippo Catalano  12
Chief Information & Digitisation Officer

Nationality Company tenure

Italian less than a month

Experience
Filippo will join Reckitt as Chief Information & Digitisation Officer and a Group
Executive Committee member on 1 April 2021. Filippo is currently SVP, Global Chief
Information Officer at Nestlé. In his role, he has led the modernisation of the
technology platforms, data, processes and tech skills for Nestlé, with growth and
efficiency enablers such as MarTech, omni-channel, machine intelligence,
automation, advanced analytics and loT implemented at scale across the Group. He
also introduced new and disruptive solutions such as voice, blockchain, chatbots
and augmented reality. Prior to Nestlé, Filippo worked at Procter and Gamble (P&G)
across geographies, categories and IT disciplines, leading the digital transformation
in key brands and corporate initiatives. Filippo brings extensive leadership
experience in defining and shaping IT, digital portfolios and technology-enabled
new business models across leading consumer goods organisations.

Reckitt Annual Report and Accounts 2020 101

 C O R P O R AT E G O V E R N A N C E R E P O R T
CHAIRMAN’S
STATEMENT
We remain committed to promoting the
long-term sustainable success of the
company and engaging with and
understanding the needs of our
shareholders and all stakeholders.
Chris Sinclair
Chairman
102
On behalf of the Board, I am pleased
to present the company’s Corporate
Governance Report for the financial
year ended 31 December 2020.
The Board’s governance and way of working adapted and evolved to
meet the challenges of COVID-19 in 2020. In January and February 2020
the Board met in person to review and endorse the new strategy laid
out by new CEO Laxman Narasimhan in February 2020, and to review our
response to the evolving COVID-19 pandemic which at that time was
primarily affecting China. Since February, all of the Board’s meetings have
been virtual and the pandemic has become a significant global problem
in which Reckitt’s products play an important role in terms of sanitation
and disinfection. In 2020, the Board and its Committees spent
considerable time to understand the impact of the pandemic on our
business and on our workforce, many of whom continued to work in our
factories around the world but many of whom have also been working
from home for many months. The Board spent considerable time on how
we managed the various risks relating to COVID-19 and ensured business
continuity and the continued availability of key products, as well as
potential opportunities and implications of the pandemic for the future.
Following reports from the Audit Committee, around the time of
publication of last year’s Annual Report in April 2020, and throughout the
financial year under review, the Board considered and monitored the
financial impact of COVID-19 on the business and reviewed scenario
planning, assessed the Group’s liquidity and ability to continue as a
going concern and considered COVID-19 specific risks. We determined
that the Group remained in a strong financial position. The Audit
Committee Report commencing on page 119 sets out further details.
The impact of COVID-19 has reinforced the importance of a
number of the UK Corporate Governance Code 2018 (the Code)
principles and provisions – the importance of effective leadership,
of the Group having a strong and clear purpose and values, and
these being cohesive with the Group’s desired culture.
In February 2020, we announced our Rejuvenating Sustainable
Growth strategy, including our new purpose, fight and compass, which
went live on 1 July 2020. We announced under our new strategy that
our business would be split into three Global Business Units: Health,
Hygiene and Nutrition. The COVID-19 pandemic has validated key
elements of our new strategy. For example, Hygiene is a foundation of
Health; our new purpose, fight and compass have been timely and are
relevant; we see digital as a key area of growth; and our transformation
programmes will help to position us to meet our business objectives.
Our strategic priorities include driving business performance, engaging
with our workforce and other stakeholders and managing potential
risks, including those arising from numerous workstreams running
concurrently under our transformation programmes. More details on our
new strategy can be found in the Strategic Report on pages 18 to 23.
Stakeholder engagement
Under section 172 of the Companies Act 2006, Directors must act in
good faith and in a way that would be likely to promote the success of
the company for the benefit of its shareholders. In its decision-making,
the Board considers wider stakeholder interests. The Group’s key
stakeholders include its employees, shareholders, customers, partners,
suppliers and the communities in which we operate. Templates for
Board papers were prepared to ensure the impact on stakeholders
was factored into any strategic decisions that required its approval.
Full details of stakeholder engagement activities undertaken during
the year can be found in our section 172 statement on pages 58 to 61.
Reckitt Annual Report and Accounts 2020
 S T R AT E G I C R E P O R T
Long-term focus
The Board continues to pursue policies and
reinvest resources so as to safeguard the long-
term health of Reckitt. It believes that this is
best achieved through a holistic approach that
pursues sustainable rewards for shareholders,
while also addressing social needs and
meeting environmental obligations. A number
of workstreams are under way as part of
our multi-year transformation programme to
rejuvenate Reckitt by establishing consistent
performance, building revenue momentum
and achieving sustained outperformance.
The Board is responsible for good
stewardship of the company to protect
shareholders’ long-term interests and ensure
its social and environmental obligations
are fulfilled. In part, through the Corporate
Responsibility, Sustainability, Ethics and
Compliance (CRSEC) Committee, it is
working to integrate sound governance
principles in business decision-making as
it moves from a narrower risk and safety-
led approach to a broader one that aligns
environment and sustainability issues with
performance and purpose. Further details
can be found in the CRSEC Committee
Report commencing on page 128.
Culture and values
Our culture and values define the way
that Reckitt does business. Our Code
of Conduct reinforces our principles of
business conduct and is communicated to
all employees each year with mandatory
training. Our values underpin our Code
of Conduct and were further enhanced
in early 2020 with our renewed purpose,
fight and compass, as described on pages
10 and 11. We also launched our refreshed
Global Code of Conduct during the year,
translated into 25 languages, which provides
clear guidance on Reckitt’s procedures and
practices. Our Global Code of Conduct sets
out the level of conduct expected from all
Reckitt employees, contractors, outsourced
personnel and joint ventures and the Board
of Directors, as accountable, ethical and
compliant owners of our Health, Hygiene and
Nutrition Global Business Units. Further detail
on our culture and values can be found in our
section 172 statement on pages 58 to 61.
Board and succession planning
As we announced last year, Adrian Hennah,
previously Chief Financial Officer (CFO), retired
from the Board and his role as CFO on 9 April
2020. On the same date, his successor, Jeff
Carr – a Reckitt alumnus – was appointed to
the Board and to the role of CFO. To ensure
a seamless transition and handover to Jeff,
Adrian remained with the company until his
retirement date of 21 October 2020. Upon
joining Reckitt, Jeff also became a member
of our Group Executive Committee. We were
delighted to welcome Jeff to the Board and
G OV E R N A N CE
back to Reckitt. The Board is confident that
Jeff is making a positive contribution to the
business in his role as CFO and he is playing a
key role in Reckitt’s strategic transformation.
After 10 years with Reckitt, Warren
Tucker retired from the Board and Audit
Committee at the conclusion of the company’s
AGM on 12 May 2020. On behalf of the
Board, I would like to thank Warren for his
valued service and strong commitment to
Reckitt, and wish him well for the future.
As part of the ongoing refreshment of
the Board, and following an extensive search
and thorough recruitment process, we
appointed Margherita Della Valle on 1 July 2020
as a new Non-Executive Director and as a
member of the Audit Committee. Margherita’s
appointment brings valuable insight, relevant
financial and sectoral expertise and challenge
to the Board and to the Audit Committee. I am
pleased to welcome Margherita to the Board.
In December 2020, we announced
that Olivier Bohuon would join Reckitt as a
Non-Executive Director and member of the
Remuneration Committee, in January 2021.
He is a successful leader, with many years of
experience as CEO of a large global company.
Olivier has deep experience in healthcare
products and markets and we are confident
that he will bring great insight to the Board.
Further details on the Board and Group
Executive Committee’s succession plans,
including the recruitment process and
selection criteria, can be found in the
Nomination Committee Report, commencing
on page 113. Biographies of the members of
our Board and Group Executive Committee
can be found on pages 94 to 101.
The Board undertakes an annual review
of its own and its Committees’ performance
and effectiveness. This year, we engaged
Lintstock Ltd to facilitate an external evaluation
of our performance and I am pleased to
report that the evaluation concluded that
the Board, its Committees and individual
Directors were performing effectively. Further
details on the Board evaluation outcomes
and actions can be found on page 110.
Code compliance and other reporting
requirements
The Board considers compliance with the
Code of utmost importance. Any instances of
non-compliance are only allowed through the
authority of the Board if it can be shown that
the spirit of the Code and good corporate
governance within the company generally
continues.
The Corporate Governance Report outlines
the company’s governance processes and the
application of the principles and provisions
under the Code and is on pages 102 to 112.
The company has complied with the Code
throughout the year ended 31 December 2020.
The Board also gives due consideration
to future legislative or regulatory changes
Reckitt Annual Report and Accounts 2020
F I N A N C I A L S TAT E M E N T S
and takes a proactive approach to ensuring
preparedness for any changes required
to practices, policies or procedures. As
an example, potential legislative changes
expected following the Kingman and Brydon
reviews into the audit industry and the
anticipated Department for Business, Energy
& Industrial Strategy (BEIS) consultation,
which will likely impact internal controls and
financial reporting, are already being given
consideration by the Audit Committee.
Further information can be found in the Audit
Committee Report, starting on page 119.
Whilst our Annual General Meetings (AGM)
are normally held as physical meetings with
shareholders encouraged to attend, owing to
COVID-19, for our 2020 AGM we recommended
that shareholders refrained from attending the
AGM in person, in line with instructions from the
UK government. Our 2020 AGM was held as a
closed meeting, with a virtual webcast which
shareholders were able to view live online. At
the time of publication, we anticipate this year’s
AGM will follow the same format as last year’s
AGM. Shareholders and their proxies should
vote by proxy in advance of the meeting.
Questions can be submitted in advance of
the AGM or by using the online facility during
the meeting, and shareholders can view the
AGM via a live virtual webcast. At this year’s
AGM, we will be proposing an additional
special resolution to adopt amended Articles
of Association of the company, allowing us
to hold a hybrid AGM going forward. Further
details are set out in the Notice of AGM.
I am extremely proud of the Board and
all our Reckitt colleagues for their continued
commitment to creating value for our
shareholders and for contributing to the
good governance and stewardship of our
business, on behalf of all our stakeholders.
Chris Sinclair
Chairman
Reckitt Benckiser Group plc
15 March 2021
103
 C O R P O R AT E G O V E R N A N C E R E P O R T C O N T I N U E D

UK Corporate Governance Code 2018

The company is premium listed on the London Stock Exchange (LSE) and this Statement is prepared with reference to the Financial Reporting Council’s
(FRC) UK Corporate Governance Code 2018 (the Code) in effect for the financial periods beginning on or after 1 January 2019, which can be found on the
FRC’s website at www.frc.org.uk, and the Disclosure Guidance and Transparency Rules requirements to provide a corporate governance statement. The
Code sets out the framework of governance for premium listed companies within the UK, emphasising the value of good corporate governance to
long-term sustainable success. It sets out governance practices in relation to Board leadership, purpose and culture; division of responsibilities on the
Board; Board composition and effectiveness; procedures for audit, risk and internal control; and remuneration practices and policies.
We are pleased to report that we have complied with the provisions of the Code. This Report sets out how the company has applied the
Principles of the Code throughout the year ended 31 December 2020 and as at the date of this Report.

Board leadership and company purpose

Key areas of Board focus in 2020
Board meetings are structured in an open atmosphere conducive to challenge and debate. Agendas are tailored to the requirements of the business
and agreed in advance by the Chairman and CEO with the support of the General Counsel & Company Secretary. Five regularly scheduled meetings
are held each year; four of these meetings this year were held via videoconference, as permitted by the company’s Articles of Association, owing to
the restrictions imposed by the COVID-19 pandemic. The formal meetings in September each year are strategy sessions which are normally held
overseas, to allow the Board to immerse itself in the Group’s operations, to visit local sites and meet the local workforce. Owing to COVID-19, the
September 2020 strategy sessions were held via videoconference. Additional meetings, which are normally held either in person, by phone or consist
of written resolutions, are held throughout the year to consider topics that may arise outside the formal standing agenda.
The Board receives operating and financial reports from the CEO and CFO on strategic and business developments as well as financial
performance and forecasts at each meeting. Detailed presentations are also made by non-Board members on material matters to the Group.
In addition, the Chairs of the Audit, Remuneration, CRSEC and Nomination Committees update the Board on the proceedings of those meetings,
including key topics and areas of concern.
At the conclusion of every scheduled Board meeting, the Chairman holds a session with the other Non-Executive Directors, without the Executive
Directors present, providing further opportunity for the Non-Executive Directors to assess the performance of the Executive Directors and help drive
future agenda items. Details of each Director’s attendance at Board meetings can be found on page 106.
The Board uses its meetings as a way of discharging its responsibilities set out in section 172 of the Companies Act 2006 and considers the various
stakeholder groups when making decisions to promote the success of the company as a whole.

104 Reckitt Annual Report and Accounts 2020

 S T R AT E G I C R E P O R T G OV E R N A N CE F I N A N C I A L S TAT E M E N T S

The following areas formed substantial areas of focus for the Board in the year:

Strategy and planning Key stakeholder

groups considered
Group budgets, forecasts and key performance targets, including assumptions, scenarios and projections

Potential mergers and acquisitions

Group debt and funding arrangements, including issuance of bonds

Reckitt strategic reviews, including COVID-19 impact at Group and Global Business Unit level, functional reviews of certain
business areas and status updates on transformation programmes
Approval of interim and final dividend payments

Review of performance of Global Business Units

Review of Reckitt’s sustainability strategy in light of the new Group strategy

Risk management and internal control

Review of Reckitt’s principal risks and internal controls, emerging risks and the Group’s risk register

Consideration and approval of the Viability Statement

Updates on the company’s response to and the impact of COVID-19 on the business, including focus on supply and
consumer demand, the workforce and risk management
Review and approval of the Group’s Treasury Policy

Results and Financial Statements

Annual Report and Financial Statements including compliance with reporting requirements

Review of going concern and liquidity considerations arising from the COVID-19 pandemic

Results and presentations to analysts

Leadership and governance

Board and Committee evaluation and effectiveness

Director and senior management succession planning, including the appointment of a new CFO and Non-Executive
Directors
Relations with shareholders and stakeholders, including Board and employee engagement sessions

Review (and approval, where appropriate) of governance matters, such as the Board Matters Reserved, Committee Terms
of Reference, Directors’ conflicts of interest and compliance with the UK Corporate Governance Code 2018 and best
practice

Other
Confirmation of arrangements for the company’s AGM, given the restrictions arising from COVID-19

Approval of Modern Slavery Act statement

Pensions

Communities Customers Shareholders Government and industry associations

Colour key Consumers Employees Partners

Reckitt Annual Report and Accounts 2020 105

 C O R P O R AT E G O V E R N A N C E R E P O R T C O N T I N U E D

Board attendance at scheduled meetings

In 2020, there were five scheduled Board meetings, plus eight additional Board meetings relating to various matters, including ongoing reviews of the
company’s strategy and holistic reviews of the impact of COVID-19 on the Group and its business including supply, finance (including reporting and
going concern), the workforce, risk management and strategy. Following the conclusion of each scheduled Board meeting, the Chairman holds a
session with the other Non-Executive Directors, without the Executive Directors present. There were four scheduled and two additional Audit
Committee meetings, four scheduled and two additional Remuneration Committee meetings, four scheduled and three additional Nomination
Committee meetings and four scheduled meetings of the CRSEC Committee.
The table sets out the attendance by individual Directors at the scheduled Board and individual Committee meetings which each Director was
eligible to attend. Directors who were not members of individual Board Committees were also invited to attend one or more meetings of those
Committees during the year. Where a Director is unavoidably absent from a Board or Board Committee meeting, they still receive and review the
papers for the meeting and typically provide verbal or written input ahead of the meeting, usually through the Chairman of the Board or the Chair of
the relevant Board Committee, so that their views are considered at the meeting. Given the nature of the business to be conducted, some of the
additional Board meetings are convened at short notice, which can make it difficult for some Directors to attend due to prior commitments and their
home locations.

Board attendance at scheduled meetings

Board Audit Remuneration CRSEC Nomination

Committee Committee Committee Committee

Andrew Bonfield 5 of 5 4 of 4 – – 3 of 3
Jeff Carr1 4 of 4 – – – –
Margherita Della Valle 2
2 of 3 0 of 2 – – –
Nicandro Durante 5 of 5 – 4 of 4 4 of 4 3 of 3
Mary Harris 5 of 5 – 4 of 4 – 3 of 3
Adrian Hennah3 1 of 1 – – – –
Mehmood Khan 5 of 5 – – 4 of 4 –
Pam Kirby 5 of 5 4 of 4 – 4 of 4 3 of 3
Sara Mathew 5 of 5 4 of 4 – – –
Laxman Narasimhan 5 of 5 – – – 3 of 3
Chris Sinclair 5 of 5 – 4 of 4 4 of 4 3 of 3
Elane Stock 5 of 5 – 4 of 4 – –
Warren Tucker4 2 of 2 2 of 2 – – –

1. Appointed to the Board on 9 April 2020

2. Appointed to the Board and Audit Committee on 1 July 2020. Margherita was unable to attend one Board meeting and two Audit Committee meetings owing to prior commitments
entered into before joining the Reckitt Board
3. Retired from the Board on 9 April 2020
4. Retired from the Board and Audit Committee on 12 May 2020

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Division of responsibilities
Board roles and responsibilities
To ensure the Board performs effectively, there is a clear division of responsibilities, set out in writing and agreed by the Board, between the
leadership of the Board and executive leadership of the business. The key roles have been defined in greater detail below.
The Chairman
• Leading the Board and taking responsibility for the Board’s overall
effectiveness in directing the company.
• Upholding the highest standards of integrity and ethical leadership,
leading by example and promoting a culture of openness and debate,
based on mutual respect, both in and outside the Boardroom and in
line with our purpose, values, strategy and culture.
• Chairing Board, Nomination Committee and shareholder meetings
and setting Board agendas.
• Encouraging constructive challenge and facilitating effective
communication between the Board, management, shareholders and
wider stakeholders, whilst promoting a culture of openness and
constructive debate.
• Ensuring an appropriate balance is maintained between the interests
of shareholders and other stakeholders.
• Leading the annual performance evaluation process for the Board
and its Committees and addressing any subsequent actions.
• Promoting the highest standards of corporate governance.
• Ensuring Directors receive accurate, timely and clear information.
• Ensuring there are appropriate induction and development
programmes for all Board members.
• Ensuring the long-term sustainability of the company.
The Senior Independent Director
• Acting as a sounding board for the Chairman on Board‑related
matters.
• Acting as an intermediary for other Directors as necessary.
• Evaluating the Chairman’s performance on an annual basis.
• Chairing meetings in the absence of the Chairman.
• Being available to shareholders and stakeholders to address any of
their concerns, which they have been unable to resolve through
normal channels.
• Leading the search and appointment process for a new Chairman, if
necessary.
The Non-Executive Directors
• Providing independent input into Board decisions through
constructive challenge and debate, strategic guidance and specialist
advice.
• Setting/approving the company’s long-term strategic, financial and
operational goals.
• Examining the day-to-day management of the business against the
performance targets and objectives set, ensuring that management
is held to account.
• Reviewing financial information and ensuring it is complete, accurate
and transparent.
• Ensuring there are effective systems of internal control and risk
management and that these are continually monitored and reviewed.
• Setting appropriate levels of remuneration for Executive Directors
and ensuring performance targets are closely aligned with
shareholder interests.
• Development of succession planning and the appointment and
removal of senior management.
Reckitt Annual Report and Accounts 2020
F I N A N C I A L S TAT E M E N T S
The Chief Executive Officer
• Principally responsible for the day-to-day management of Reckitt, in
line with the strategic, financial and operational objectives set by the
Board.
• Chair of the Group Executive Committee, consisting of the CEO, the
CFO and senior management executives, who together are
responsible for execution of the company’s strategy and achieving its
commercial aims.
• Effective development and implementation of strategy and
commercial objectives as agreed by the Board.
• Managing Reckitt’s risk profile and establishing effective
internal controls.
• Ensuring there are effective communication flows to the Board and
the Chairman, and that they are regularly updated on key matters,
including progress on delivering strategic objectives.
• Regularly reviewing the organisation structure, developing an
executive team and planning for succession.
• Providing clear leadership to promote the desired culture, values and
behaviours to inspire and support the company’s workforce.
• Ensuring the long-term sustainability of the business.
The Chief Financial Officer
• Supporting the CEO in developing and implementing the company’s
strategy.
• Leading the global finance function, developing key talent and
planning for succession.
• Responsible for establishing and maintaining adequate internal
controls over financial reporting and for the preparation and integrity
of financial reporting.
• Ensuring the Board receives accurate, timely and clear information in
respect of the Group’s financial performance and position.
• Developing and recommending the long-term strategic and financial
plan.
The Company Secretary
• Providing advice and support to the Chairman and all Directors.
• Advising and keeping the Board up to date on all relevant legal and
governance requirements and ensuring the company is compliant.
• Ensuring the Board receives high-quality, timely information in
advance of Board meetings to ensure effective discussion.
• Facilitating the induction programme for all Board members.
• Ensuring there are policies and processes in place to help the Board
function efficiently and effectively.
A full description of the roles and responsibilities of the Chairman,
Chief Executive Officer and Senior Independent Director can be found
in the Corporate Governance section of our website: www.reckitt.com
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Our governance framework

The Board has established four Board Committees to assist in the execution of its responsibilities. These are the Nomination Committee, Audit
Committee, Remuneration Committee and CRSEC Committee. Each Committee operates under terms of reference approved by the Board. The
terms of reference are reviewed regularly, the last review taking place in November 2020, and can be found on the company’s website, www.reckitt.
com. The current Committee membership of each Director is shown on pages 95 to 98. There are also two supporting management committees:
the Disclosure Committee and the Group Executive Committee.

Board
The Board is responsible for the overall leadership of the Group and for promoting its long-term success
whilst focusing on its governance with the highest regard to the principles of the Code.

Nomination Committee Audit Committee Remuneration Committee CRSEC Committee

Chaired by Chris Sinclair
The Nomination Committee’s
key objective is to make
recommendations to the
Board on suitable candidates
for appointment to the Board,
its Committees and senior
management and regularly
review and refresh their
composition to ensure that
they comprise individuals
with the necessary skills,
knowledge and experience
to effectively discharge
their responsibilities,
whilst keeping in mind the
importance of diversity.
Chaired by Andrew
Bonfield
The Audit Committee is
responsible for monitoring
the integrity of Reckitt’s
Financial Statements and
is responsible for ensuring
effective functioning of
internal audit, internal
financial control and risk
management. It is also
responsible for managing
the company’s relationship
with the External Auditor.
Chaired by Mary Harris
The Remuneration
Committee assists the Board
in fulfilling its oversight
responsibility by ensuring that
Remuneration Policy and
practices reward fairly and
responsibly; are linked to
corporate and individual
performance; and take
account of the generally
accepted principles of good
governance. The Committee
is responsible for determining
the remuneration for the
Chairman, Executive
Directors and senior
management.
Chaired by Pam Kirby
The CRSEC Committee
was established in July 2016
to support the Board in
reviewing, monitoring and
assessing the company’s
approach to responsible,
sustainable, ethical and
compliant corporate conduct
and to assist the Board
in upholding its values of
honesty and respect.

More details are set out in the More details are set out in the More details are set out in the More details are set out in the
Nomination Committee Audit Committee Report on Remuneration Committee CRSEC Committee Report
Report on pages 113 to 118 pages 119 to 127 Report on pages 134 to 157 on pages 128 to 133

Disclosure Committee Group Executive Committee

Chaired by Laxman Narasimhan
The Disclosure Committee’s key objective is to ensure accuracy
and timeliness of disclosure of financial and other public
announcements.
Chaired by Laxman Narasimhan
The Group Executive Committee is responsible for overseeing
Reckitt’s management and recommending and implementing the
strategy and budget as approved by the Board. It ensures liaison
between functions, reviews major investments and approves
business development plans.

Board responsibilities
The Board is responsible for the effective leadership of the Group and for promoting its long-term sustainable success, generating value for
shareholders and contributing to wider society, whilst focusing on governance with the highest regard to the principles of the Code. The Board
provides leadership by setting the company’s purpose, strategy and values, monitoring our culture and ensuring alignment with purpose, strategy and
values, and overseeing implementation by management. All Directors must act with integrity, lead by example and promote the company’s culture
and values. The Board also ensures there are appropriate processes in place to manage risk, including the company’s risk appetite and monitors the
company’s financial and operational performance against objectives.
The Board consists of a balance of Executive and Non-Executive Directors who together have collective accountability to Reckitt’s shareholders
and stakeholders as well as responsibility for the overriding strategic, financial and operational objectives and direction of Reckitt. It is the Board’s
responsibility to ensure there are effective engagement methods in place with its stakeholders. Further information on the Board’s engagement
activities can be found in the section 172 statement set out on pages 58 to 61.

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 S T R AT E G I C R E P O R T G OV E R N A N CE
The Board manages the overall leadership of the Group with reference
to its formal Schedule of Matters Reserved for the Board. This schedule is
reviewed annually, with the last review undertaken in November 2020,
and broadly covers:
• matters which are legally required to be considered or decided by
the Board, such as approval of Reckitt’s Annual Report and Financial
Statements, declaration of dividends and appointment of new
Directors;
• matters recommended by the Code to be considered by the Board,
such as terms of reference for the Board and its Committees, review
of internal controls and risk management;
• compliance with regulations governing UK publicly listed companies,
such as the UK Listing Rules, the Disclosure Guidance and
Transparency Rules and the Prospectus Regulation Rules; and
• matters relating to developments in, or changes to, the Group’s
strategic direction, material corporate or financial transactions.
The full Schedule of Matters Reserved for the Board is available at
www.reckitt.com/investors/corporate-governance.
The principal activities undertaken by the Board are set out over the
following pages. A summary overview is set out in the table on Board
focus areas in 2020 on page 105.
Managing conflicts of interest
Directors have a duty under the Companies Act 2006 (CA 2006) to
avoid interests, direct or indirect, which might conflict with the interests
of the Group. Under the terms of the company’s Articles of Association,
such conflicts can be authorised by the Board. Procedures are in
place to manage and, where appropriate, approve such conflicts.
Any authorisations granted by the Board are recorded by the Company
Secretary in a Register of Conflicts, together with the date on which
the conflict was authorised. Any conflicts authorised during the year
are reviewed annually by the Board. In addition, each Director certifies
on an annual basis that the information contained in the Register of
Conflicts is correct.
The company indemnifies the Directors and Officers of the company
and any Group subsidiary to the extent permitted by CA 2006 and the
Listing Rules in respect of the legal defence costs for claims against them
and third-party liabilities. The indemnity would not provide cover for a
Director or Officer if that individual was found to have acted fraudulently
or dishonestly. Additionally, Directors’ and Officers’ liability insurance cover
was maintained throughout the year at the company’s expense.
Managing time commitment and ‘overboarding’
On appointment, Non-Executive Directors are made aware and are
required to confirm that they will allocate sufficient time to their role to
discharge their responsibilities effectively. They are also required to seek
agreement from the Chairman before taking on additional commitments,
and to declare any actual or potential conflicts of interest. Non-Executive
Directors are engaged under the terms of a letter of appointment. Initial
terms of appointment are for three years with one month’s notice, with
all Directors standing for election or re-election at every AGM. The Board
has examined the length of service of each Director and considers that
the Chairman and each Non-Executive Director standing for re-election
or election at this year’s AGM is independent. The Board considers all
Non-Executive Directors who served during the year to be independent.
Reckitt Annual Report and Accounts 2020
F I N A N C I A L S TAT E M E N T S
The Nomination Committee has principal responsibility delegated to it
for making recommendations to the Board on new appointments and
the composition of the Board and its Committees. The Board and each
Director is confident that each Director individually has the expertise and
relevant experience required to perform the role of a Director of a listed
company and to contribute effectively to the Board and Committees to
which they are appointed. The company recognises the developmental
advantages of an external non-executive role on a non-competitor
board and Executive Directors are permitted to seek such a role,
provided that they do not take on more than one non-executive
directorship in, or become the Chairman of, a FTSE 100 company.
Jeff Carr is currently a Non-Executive Director of Kingfisher plc.
We acknowledge that Sara Mathew sits on three external Boards,
one of which being a chair position for a listed US company. The
Nomination Committee has assessed and is satisfied that Sara is able to
dedicate sufficient time to her role and will continue to monitor her time
devoted to the position to ensure this remains appropriate.
The 2020 evaluation of the Board’s performance during the year
concluded that the Chairman and all Non-Executive Directors continue
to devote sufficient time to carrying out their duties to the company.
Each Director standing for election or re-election has individually
provided assurances that they remain committed to their roles and can
dedicate sufficient time to perform their duties. Accordingly, the Board
recommends that shareholders vote in favour of the resolutions to
re-elect or elect the Directors put forward for re-election or election at
the 2021 AGM.
Board support
The Company Secretary is responsible for organising Board meetings, as
well as collating any papers for the Board to review and consider. Board
and Committee papers are accessible to all Directors through a secure
and confidential electronic document storage facility. This facility is
maintained by Reckitt’s Secretariat function and additionally holds other
information which the Chairman, the CEO or the Company Secretary may
deem useful to the Directors, such as press releases and pertinent
company information.
All of the Directors have individual access to advice from the
Company Secretary and a procedure exists for Directors to take
independent professional advice at the company’s expense in
furtherance of their duties.
Composition, succession and evaluation
Board composition and succession planning
The Board regularly reviews its composition to determine whether it has
the right mix of skills, experience, diversity and background, to
effectively perform its duties. The Board also reviews senior
management positions to ensure a proper breadth of talent is
developed. Appointments are subject to a formal, rigorous and
transparent procedure and are based on merit and objective criteria,
promoting diversity of gender, social and ethnic backgrounds, cognitive
and personal strengths. Details of our commitment to inclusion and
diversity at Board and senior management level can be found on page
118 of the Nomination Committee Report. The Board has appointed
Directors from a wide variety of business backgrounds to provide it with
a strong balance of skills and experience relevant to the company’s
sector. The Board is comprised of the Chairman and a majority of
Non-Executive Directors who, together with the Executive Directors,
help maintain a solid, collective understanding of the company and its
day-to-day business.
In accordance with the Code, every Director submits him or herself
for election or re-election (as appropriate) at every AGM.
More details about the current Board members can be found on pages
94 to 98. An overview of succession planning activities during the year can
be found in the Nomination Committee Report on pages 113 to 118.
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Evaluation of the Board
The Board undertakes an annual review of its own and its Committees’
performance and effectiveness, with a formal externally facilitated
evaluation of the Board conducted at least every three years. An
externally facilitated evaluation took place in 2019, conducted by MWM
Consulting Limited, as reported in last year’s Annual Report. This year, we
engaged Lintstock Ltd (Lintstock) to facilitate a 3-year Board
Development Programme, starting with a survey-driven review in 2020.
The process consisted of an online questionnaire sent to all Directors,
covering the performance of the Board, its Committees and the
Chairman. The review also addressed issues such as Director
performance, and the perception of the Board by management, the
recent changes in the management team and the Board and wider
organisation’s response to the challenges presented by COVID-19.
Lintstock is independent of and has no other links with the company or
its Directors in connection with the evaluation.
The key topics featured in the questionnaire included: Board composition
and diversity; stakeholder oversight; Board dynamics and support;
management and focus of meetings; COVID-19 case study; strategic
oversight; risk management and internal control; succession planning and
HR management; and priorities for change.
A report, with action points and recommendations for the Board to
consider, was distributed to Directors and the results of the evaluation
were subsequently discussed by the Board at its November meeting.
In addition, the Chairman’s performance was considered by the
Senior Independent Director with input from his fellow Non-Executive
Directors and discussed following the November Board meeting without
the Chairman present. The discussion concluded that the Chairman
continued to devote sufficient time to his role, and continued to lead the
Board constructively, demonstrating objective judgement, and
encouraging a culture of openness and debate.

Principal outcomes of the Board evaluation

Board composition and diversity Succession planning and HR management

• Board composition was rated highly by respondents but room for
improvement was noted. Board composition, including diversity, is
being addressed through the Nomination Committee. Identifying
skills and experience gaps and focusing succession planning on key
Board roles would be key.
Stakeholder oversight
• Stakeholder oversight was rated highly overall and significant
improvement noted. The Board is keen to broaden its understanding
of and involvement with consumers and customers. This is partly
being addressed through the Board engagement work Mary Harris is
leading in her role as Designated Non-Executive Director for
engagement with the company’s workforce and also through
focused reporting to the Board on consumers and customers. The
importance of maintaining visibility of culture was emphasised.
Board dynamics and support
• Non-Executive Directors’ engagement with management scored
positively. Ensuring the Board’s oversight remains sufficiently
strategic is important.
• The Board continues to work towards crisper materials and shorter
presentations, leaving more time for discussion at meetings.
• Training should receive greater focus, including regular governance
training.
Risk management and internal controls
• Although rated as a strength, the Board’s oversight of risk appetite
and mitigation could receive deeper review. The Board, supported
by the Audit Committee, is reviewing a number of risk management
processes.
• The value of increased Board engagement with the new leadership
team was emphasised. Increased Board oversight of talent
management was identified as an area of opportunity.
Strategic oversight
• Clarity of the current strategy, testing and development of strategy
scored highly, as did the Board’s understanding of key Reckitt
markets. Technological developments and opportunities,
understanding competitor performance and focusing on IFCN, China
and people and talent were identified as a key focus areas for the
Board in the next 3-5 years.
Management and focus of meetings
• The management of meetings was rated highly, including remote
meetings which had been used for most of 2020. It was important to
ensure time spent at meetings was balanced between topics, and a
greater external focus could be valuable.
COVID-19
• The Board’s effectiveness in adjusting its prioritisation and focus in
response to COVID-19 was rated highly, as was the quality of
Reckitt’s communications during the pandemic.

The 2020 review of the Board’s performance and that of its Committees concluded that the Board, its Committees and individual Directors were
performing effectively. The Board was observed to have a good mix of skills, sector-relevant experience, knowledge and diversity and the length of
tenure of the Board as a whole was deemed appropriate. Board members worked well together to achieve objectives, with a sufficient degree of
support and challenge provided by Directors. As part of the strategy we launched in February 2020, we believe that by valuing and embracing our
differences – at all levels of the business and also as individual members of society – we are ‘stronger together’. This drives our compass. We can only
truly live our purpose and win our fight if the differences of all of our people are celebrated, as diversity and inclusion is a business need as much as it
is a social need.
All individual Directors were considered to be contributing effectively. The value of Non-Executive Director only and Executive only sessions
was highlighted. The key priorities for the Board over the coming year will be talent and succession planning, engagement with management, risk
management and strategy. The Board has reviewed the recommendations of the evaluation and is taking steps to address these. The principal
outcomes of the review will be reviewed and reassessed as part of the Board’s 2021 evaluation.

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 S T R AT E G I C R E P O R T G OV E R N A N CE
Audit, risk and internal control
Risk management
The Audit Committee supports the Board in fulfilling its oversight
responsibilities in ensuring the integrity of the Group’s financial reporting
(including the Annual Report and Financial Statements), internal controls
and overall risk management process and the relationship with the
External Auditor. The Audit Committee makes recommendations to the
Board in relation to approval of the Annual Report and Financial
Statements. More information on the role of the Audit Committee can be
found in the Audit Committee Report, from pages 119 to 127.
The Board has ultimate responsibility for preparing the Annual Report
and Financial Statements. Reckitt has implemented robust internal
controls to safeguard the integrity of both the Group and its subsidiary
Financial Statements and ensures that adequate verification processes
are in place to enable it to confirm that the Group’s Financial Statements
present a fair, balanced and understandable assessment of Reckitt’s
position and prospects, in line with the Code’s requirements. The Board
considers that the Annual Report and Financial Statements taken as a
whole are fair, balanced and understandable and provide sufficient
information for shareholders to be able to assess the company’s position,
performance, business model and strategy.
Reckitt’s finance function, headed by the CFO, has implemented a
number of policies, processes and controls to enable the company to
review and fully comply with changes in accounting standards, financial
regulations and recognised practices. These processes are kept under
review on an ongoing basis. Multiple teams including consolidation and
financial accounting, together with technical support, ensure both
internal and external developments are reviewed and responded to. The
Group also maintains a Finance Manual setting out the required standards
of financial reporting and approvals across the Group and its operating
units, including a structured process for the appraisal and authorisation
of any material capital projects.
The basis for the preparation of the Group Financial Statements is set
out on page 179 under Accounting Policies.
The company’s External Auditor’s Report, setting out its work and
reporting responsibilities, can be found on pages 162 to 173. The terms,
areas of responsibility and scope of the External Auditor’s work are
agreed by the Audit Committee and set out in the External Auditor’s
engagement letter.
More information on the Group’s principal and emerging risks and
strategy for growth and achieving targeted goals is detailed in the
Strategic Report, which can be found on pages 80 to 92.
The Viability Statement can be found on page 93.
The Statement of Directors’ Responsibilities on page 161 details
the going concern statement as required by the Listing Rules and the
Code and the Directors’ responsibility for the Financial Statements, for
disclosing relevant audit information to the External Auditor and for
ensuring that the Annual Report is fair, balanced and understandable.
Reckitt Annual Report and Accounts 2020
F I N A N C I A L S TAT E M E N T S
Risk appetite
The Board has overall responsibility for compliance with the Code and
the FRC’s Guidance on Risk Management, Internal Control and Related
Financial and Business Reporting. It oversees the internal controls
established, and monitors their effectiveness, in managing and
mitigating significant risks. The sectors and environment within which
Reckitt operates are dynamic and fast moving, and in some areas highly
regulated, and the controls are continually kept under review to minimise
the potential exposure to risk. The system is designed to assess and
manage, rather than eliminate, risks to Reckitt’s business objectives, and
the Board relies on these controls insofar as they are able to provide
reasonable, but not absolute, assurance against material misstatement or
loss. The Group’s principal and emerging risks and mitigating factors are
detailed on pages 80 to 92.
As part of its risk control, Reckitt regularly evaluates its risks to
achieving objectives, and the likelihood of such risks materialising and
determining the ability of the Group to cope with the circumstances
should they occur. In doing so, we are inherently considering our risk
appetite through the actions that can be taken, controls that can be
implemented and processes that can be followed to reduce the
chances of risk events taking place, mitigating the potential impact and
ensuring that the cost of doing so is proportionate to the benefit gained.
Internal control
Internal control processes are implemented through clearly defined roles
and responsibilities, supported by clear policies and procedures,
delegated to the executive team and senior management.
Reckitt operates three strands in monitoring internal control systems
and managing risk:
• Management ensures that the controls, policies and procedures are
followed in dealing with risks in day-to-day business. Such risks are
mitigated at source with controls embedded into the relevant
systems and processes. Supervisory controls either at management
level or through delegation ensure appropriate checks and
verifications take place, with any failures dealt with promptly and
awareness raised in order to review gaps in existing controls.
Throughout Reckitt, a key responsibility for any line manager is to
ensure the achievement of business objectives with appropriate risk
management and internal control systems.
• Each function and Global Business Unit has its own management
which acts as a second line of oversight and verification. This level
sets the local level policies and procedures, specific to its own
business environment, subject to Group policy and authorisation.
They further act in a supervisory capacity over the lower level
management implementation of controls. The financial performance
of each function and Global Business Unit is monitored against
pre-approved budgets and set against forecasts, developed higher
up the management chain, and ultimately overseen by the executive
management and the Board.
• The third strand is provided through independent review by the
Internal Audit team, who challenge the information and assurances
provided by the first two strands. This review ultimately gets reported
back to the Board, via the Audit Committee, with action taken to
address matters identified. More details on the Audit Committee and
its activities can be found on pages 119 to 127. The Group’s compliance
controls further include operating an independent and anonymous
‘Speak Up’ whistleblowing hotline, annual management reviews and
providing training specific to individual needs within the business. The
Board is also provided with reports on the effectiveness of these
controls to ensure full oversight of the business.
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Reckitt is committed to maintaining strong internal controls and further
enhancing these. Further information on internal control activities during
the year can be found on page 124 of the Audit Committee Report.
Functional and operational management meet to discuss performance
measured against strategic aims and goals, with risks and risk controls
incorporated into the discussions. During the year, the Directors
undertook a robust assessment of the principal and emerging risks
facing the company, including those that could threaten Reckitt’s
business model, future performance, solvency and liquidity. Each
principal and emerging risk is overseen by the Board, or a designated
Committee of the Board, and is subject to formal deep dive reviews as
appropriate at Board, Group Executive Committee and Global Business
Unit meetings.
More detail on the Group’s principal strategic risks and uncertainties
can be found in the Strategic Report on pages 01 to 93.
The CRSEC Committee focuses on the company’s corporate social
responsibilities, environmental and sustainability issues and overall ethical
conduct and regulatory compliance. Further details of the work of the
Committee can be found in the report of the CRSEC Committee Chair
from page 128.
The Audit Committee focuses on maintaining the integrity of financial
reporting, reviewing and challenging management on the robustness of
internal controls and risk management systems, and providing oversight
and reassurance to the Board on risk management processes and
control procedures, with support from the External Auditor. Further
details of the work of the Committee can be found in the Audit
Committee Report from page 119.
The Board confirms that reviews and monitoring of the
appropriateness and effectiveness of the system of internal control
and risk management throughout the financial year and up to the
date of approval of the Annual Report and Financial Statements
have been satisfactorily completed with no significant failings or
weaknesses identified.
112 Reckitt Annual Report and Accounts 2020
Governance
Annual General Meeting and shareholder voting
The Board views the AGM as a valuable opportunity to meet with its
private shareholders, giving them an opportunity to put questions to
the Chairman, the Chairs of the Committees and the Board. Whilst
our AGMs are normally held as physical meetings with shareholders
encouraged to attend, owing to COVID-19, for our AGM in 2020 we
recommended that shareholders refrained from attending the AGM in
person, in line with instructions from the UK government. Our 2020 AGM
was held as a closed meeting, with a virtual webcast which shareholders
were able to view live online.
All shareholders can vote on the resolutions put to the meeting. In
line with good governance, voting is by way of poll, providing one vote
for each share held. Results of the poll are released to the LSE and
published on the Group’s website shortly after conclusion of the AGM.
The Investment Association (IA) has launched a public register of
FTSE All-Share companies which have received votes of 20% or more
against any shareholder resolution, or which withdrew a resolution prior
to a shareholder vote, along with company statements of actions taken
following the vote. At our AGM in May 2020, all resolutions were passed
and no resolution had a vote of 20% or more against it.
At the time of publication, we anticipate this year’s AGM will follow
the same format as last year’s AGM. Shareholders and their proxies
should vote by proxy in advance of the meeting. Questions can be
submitted in advance of the AGM or by using the online facility during
the meeting, and shareholders can view the AGM via a live virtual
webcast. At this year’s AGM, we will be proposing an additional special
resolution to adopt amended Articles of Association of the company,
allowing us to hold a hybrid AGM going forward. Further details are set
out in the Notice of Annual General Meeting.
Website
The Investor Relations section of the Reckitt website provides the Board
with an additional method of communicating to shareholders. As well as
the latest regulatory disclosures, copies of the latest and previous years’
Annual Reports, latest share price information and copies of previous
investor presentations and key calendar dates are available. The page
can be found at www.reckitt.com/investors
Shareholders can also access information on all our sustainability
activities, our Modern Slavery Statement, our Gender Pay Gap
Report and associated policies on the Reckitt website at
www.reckitt.com/sustainability
 S T R AT E G I C R E P O R T
N O M I N AT I O N C O M M I T T E E R E P O R T
We were pleased with the successful
onboarding of our new Chief Financial
Officer during the year, together with
the refreshment of our Group Executive
Committee which saw the creation of
new leadership roles and appointments,
further enhancing our leadership and
strategic capabilities.
Chris Sinclair
Chair of the Nomination Committee
Reckitt Annual Report and Accounts 2020
G OV E R N A N CE F I N A N C I A L S TAT E M E N T S
On behalf of the Board, I am pleased to
present the Nomination Committee
Report for the financial year ended
31 December 2020.
The Committee plays an important role to ensure that the composition
of the Board is appropriate for the company to achieve its strategic
goals. During the year, the Committee’s primary focus was to ensure that
the Board and Group Executive Committee had the appropriate balance
of skills, experience and composition to successfully implement our
Rejuvenating Sustainable Growth strategy. This year, we have
considerably improved gender diversity at Board level, whilst at Group
Executive Committee level we recognise there is more work to be done
to improve female representation within senior management roles.
There were changes to the membership of the Board and our Group
Executive Committee during the year. A critical achievement of the CEO
during 2020, with the support and oversight of the Committee, was the
refreshment of our Group Executive Committee, which saw the creation
of new leadership roles and appointment of new members. Notable
highlights at Board level included the onboarding of our new Chief
Financial Officer, Jeff Carr; and the appointment and induction of two
new Non-Executive Directors, Margherita Della Valle and Olivier Bohuon.
This year meetings of the Committee took place virtually due to the
COVID-19 pandemic. During a challenging year, I am pleased with the
continued progress by the Committee and I am grateful to my fellow
Directors for their support and dedication.
Board changes during the year
As we announced last year, Adrian Hennah, previously Chief Financial
Officer (CFO), retired from the Board and his role as CFO on 9 April 2020.
On the same date, his successor, Jeff Carr – a Reckitt alumnus – was
appointed to the Board and to the role of CFO. To ensure a seamless
transition and handover to Jeff, Adrian remained with the company until
his retirement date of 21 October 2020. Upon his appointment, Jeff also
became a member of our Group Executive Committee. The Committee
are delighted to welcome Jeff to the Board and back to Reckitt. We are
confident Jeff is making a positive contribution to the business in his role
as CFO and is playing a key role in Reckitt’s strategic transformation.
Further Director changes were also announced during the year. At
the conclusion of the 2020 AGM, Warren Tucker stood down from the
Board and as a member of the Audit Committee after ten years of
service as a Non-Executive Director. On behalf of the Board, I would like
to extend our gratitude to Warren for his excellent service and wish him
well in his future endeavours.
On 1 July 2020, as part of the ongoing refreshment of the Board, we
were pleased to announce the appointment of Margherita Della Valle to
the Board as a Non-Executive Director and member of the Audit
Committee. Margherita is currently Chief Financial Officer and Executive
Director of Vodafone Group Plc, a role she has held since 2018.
Margherita brings to the Board extensive experience of financial markets
and digital technologies, of doing business in both developed and
developing markets, combined with deep financial experience. I am
pleased to welcome Margherita to the Board.
In December 2020, following an extensive search and thorough
recruitment process, we announced that Olivier Bohuon would join
Reckitt as a Non-Executive Director and member of the Remuneration
Committee, in January 2021. Olivier is a successful leader, with many
years of experience as CEO of a large global company. Olivier has deep
experience in healthcare products and markets, bringing great insight to
the Board.
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 N O M I N AT I O N C O M M I T T E E R E P O R T C O N T I N U E D
Refreshment of our Group Executive Committee (GEC)
Our GEC has seen several changes during the year to support our
strategic priorities, improve top-level leadership and add valuable skills
and experience to the Committee. The launch of Reckitt’s new strategy
in 2020 saw the business organised into three focused Global Business
Units – Health, Hygiene and Nutrition – to enable greater category focus
and growth. At the time of the strategy launch it was recognised that
China and e-commerce present major opportunities for Reckitt and its
focus has been enhanced across the three Global Business Units. The
new structure was supported by the creation of new leadership roles for
Harold van den Broek, Kris Licht and Aditya Sehgal, as Presidents of
Hygiene, Health and Nutrition. Kris Licht was also appointed as Chief
Customer Officer for the Group, and Aditya Sehgal as lead for eRB &
Greater China.
During the year there were a number of membership changes
to our GEC. As previously announced last year, Gurveen Singh, Chief
Human Resources Officer, stepped down as a GEC member in
March 2020 and retired from Reckitt in June 2020. We express our
gratitude and thanks to Gurveen for her commitment to Reckitt.
In March 2020, Ranjay Radhakrishnan joined Reckitt, taking on
the role as Chief Human Resources Officer and a GEC member.
Ranjay is an experienced HR leader having spent his career in a
range of senior leadership roles in the UK and globally. Ranjay has
already added great value to the HR function during a challenging
year and we are pleased to welcome him to the GEC.
In addition, we welcomed Jeff Carr, Chief Financial Officer, as a
member of the GEC in April 2020. We were also delighted to announce
in April 2020 the promotions of Zephanie Jordan, SQRC Officer and
Miguel Veiga-Pestana, Head of Corporate Affairs & Chief Sustainability
Officer as members of the GEC, adding valuable insight, leadership and
representation at GEC level in the fields of regulatory compliance,
communications, external affairs and sustainability. At the end of the
year, regretfully, Zephanie Jordan, indicated her intention to leave Reckitt
in 2021 to move back to her home country, Australia. Zephanie stepped
down as a GEC member on 1 January 2021. On behalf of the Committee
and the Board I would like to express our gratitude to Zephanie, for her
dedication and commitment to Reckitt.
114 Reckitt Annual Report and Accounts 2020
We were pleased to make further new appointments to the GEC during
the year. In July 2020, Sami Naffakh, a Reckitt alumnus, joined Reckitt as
Chief Supply Officer and a member of the GEC. In August 2020, Volker
Kuhn joined Reckitt as Chief Transformation Officer and a member of the
GEC, taking over the role from Kris Licht, with responsibility for driving
productivity, new business solutions, strategy and further growth
opportunities. In September 2020, we further advanced our commitment
towards Reckitt’s R&D function by welcoming Angela Naef to Reckitt as
Chief R&D Officer and as a member of the GEC. Angela’s role is essential
in elevating our Research & Development Strategy and capabilities, our
continued investment in science and further enhancing science
partnerships, all of which are core drivers of our Reckitt transformation.
The Committee is delighted to have these new GEC members with us
and are confident they will make a great contribution to Reckitt.
In October 2020 we announced that Filippo Catalano would join
Reckitt as a GEC member in a newly created role as Chief Information &
Digitisation Officer, effective 1 April 2021. We are confident that the role
and representation of this seat on the GEC will strengthen the direction,
vision and leadership of our IT and Digital Function and contribute to the
growth of Reckitt. We look forward to welcoming Filippo to Reckitt.
In March 2021 we announced that Harold van den Broek would be
leaving Reckitt on 31 May 2021. We would like to thank Harold for his
outstanding contribution to the business and wish him well in his future
endeavours. At the same time, we announced that Volker Kuhn, Chief
Transformation Officer would assume the role of President Hygiene on
1 May 2021, following a smooth transition of responsibilities from Harold.
Committee priorities for 2021
• Succession planning for Board members, GEC and senior
management positions.
• To further progress female representation and diversity generally at
GEC level and within senior management roles.
• To continue to keep under review diversity, culture & inclusion across
Reckitt.
• Ongoing renewal of the Non-Executive Directors of the Board.
I would like to thank my fellow Committee members for their
exceptional support during another busy year for the Committee.
Chris Sinclair
Chair of the Nomination Committee
Reckitt Benckiser Group plc
15 March 2021
 S T R AT E G I C R E P O R T G OV E R N A N CE
Composition
The members of the Committee during the year were:
Composition Tenure during the year
Chris Sinclair (Chair) Chair and member of the Committee for
the whole year
Andrew Bonfield Member for the whole year
Nicandro Durante Member for the whole year
Pam Kirby Member for the whole year
Mary Harris Member for the whole year
Laxman Narasimhan Member for the whole year
Members of the Committee are appointed by the Board. Membership is
set out in the Committee’s terms of reference and comprises the
Chairman, CEO, Senior Independent Director and Chair of each of the
Board’s Committees. In accordance with the principles of the UK
Corporate Governance Code 2018 (the Code), the Committee is made
up of a majority of independent Non-Executive Directors. The Company
Secretary acted as Secretary to the Committee during the year.
The membership of the Committee is reviewed annually by the
Chairman, as part of the annual performance evaluation of the
Committee. All Directors are required to seek election or re-election
each year at the AGM. Biographical details of the Directors, explaining
their skills and expertise, can be found on pages 94 to 98.
Meetings
Meetings of the Committee are held as needed but are required to take
place at least once a year. In 2020 the Committee held four meetings, all
of which were held virtually due to COVID-19. Meetings usually take place
ahead of Board meetings and the Chair of the Committee reports
formally to the Board on its proceedings. Attendance at Committee
meetings is set out in the Board attendance schedule on page 106 of the
Corporate Governance Report.
During the year, Committee members held meetings with candidates
shortlisted for the position of Non-Executive Director, reported their
feedback at Committee meetings and made recommendations to the
Board. Further details on the Non-Executive Director search and
recruitment process are discussed on the following pages.
Role and responsibilities of the Nomination Committee
The role of the Committee is to ensure there is a formal, rigorous and
transparent procedure for the appointment of new Directors to the
Board, to lead the process for Board appointments and make
recommendations to the Board. The Committee also assists the Board in
succession planning for top senior management. The role of the
Committee includes, but is not limited to, the following matters:
• Regularly reviewing the composition (including skills, experience,
independence, knowledge and diversity) of the Board and making
recommendations to the Board with regard to any changes deemed
necessary, taking into account the length of service of the Board as a
whole and the need to regularly refresh membership.
• Reviewing the composition of each of the Board Committees and
evaluating the performance and effectiveness of each Director.
• Keeping under review the leadership capabilities of the company,
covering both Executive, Non-Executive and senior management
positions, ensuring plans are in place for orderly succession, with a
view to ensuring the continued ability of the company to compete
effectively in the markets in which it operates. Reckitt’s Share Dealing Code and closed period dates. Jeff received
Reckitt Annual Report and Accounts 2020
F I N A N C I A L S TAT E M E N T S
• Ensuring that all newly appointed Directors undertake an appropriate
induction programme to ensure that they are fully informed about the
strategic and commercial issues affecting the company and the
markets in which it operates, as well as their duties and
responsibilities as a Director of the Board and member of Board
Committee(s).
• Keeping under annual review and continually monitoring potential
conflicts of interest, and, if appropriate, authorising situational
conflicts of interest, whilst ensuring the risk of unacceptable
influence resulting from any conflict of interest is minimised.
A further description of the Committee’s roles and responsibilities is set out in
its terms of reference which can be found on our website: www.reckitt.com
Executive Director succession planning
Chief Financial Officer appointment and induction
During the year, Adrian Hennah retired as Chief Financial Officer and Jeff
Carr took over the role of Chief Financial Officer on 9 April 2020. We
instructed Egon Zehnder International Ltd to carry out the search for a
new Chief Financial Officer. Both internal and external candidates had
been considered and a shortlist drawn up, which was followed by
meetings with the Chairman and the Chair of the Audit Committee. Jeff
was considered the most suitable candidate and best fit, given his
wealth of experience in global consumer goods and retail companies
and strong track record, coupled with his previous experience at Reckitt
and understanding of the business and our culture.
Egon Zehnder International Ltd is an independent executive search
firm which undertakes a number of executive (as well as non-executive)
searches for the Group and is a signatory of the Voluntary Code of
Conduct for Executive Search Firms in the UK to address diversity and
best practice relating to Board appointments. They do not have any
connection to or provide any other services to the company or its
individual Directors.
Jeff Carr embarked on an intensive handover process under the
leadership of Laxman Narasimhan, Chief Executive Officer and the
guidance of our former Chief Financial Officer, Adrian Hennah. Adrian
stayed with Reckitt until 21 October 2020 to ensure a successful
handover and for Jeff to benefit from his knowledge and insight of how
the business operates. Due to travel restrictions imposed by COVID-19,
Jeff was unable to travel to our key Reckitt sites during 2020 and instead
his induction meetings took place virtually.
As part of Jeff’s tailored induction programme, he met virtually and
had discussions with the Chairman, CEO and General Counsel &
Company Secretary. During Jeff’s induction programme he was also
introduced to key members of the GEC, including the Presidents of the
three Global Business Units (GBU); the Head of Corporate Affairs & Chief
Sustainability Officer; Chief Human Resources Officer; and former Chief
SQRC Officer. To gain even greater insight into the business, Jeff had
meetings with members of Reckitt’s senior management team, to
provide an understanding of Reckitt’s operations in the areas of
Research & Development; Manufacturing; Supply; and Sales. Jeff also
had the opportunity to speak with members of senior management
within the business especially within the Corporate Group Functions,
which included; IT; Tax; Treasury; HR; Finance; Audit; Investor Relations
and Reward.
Jeff’s induction also included detailed discussions, led by the General
Counsel & Company Secretary on compliance matters, covering,
Directors’ Duties and Liabilities, disclosure of Conflicts of Interest and
Persons Closely Associated, the EU Market Abuse Regulation (MAR),
copies of the Board and Committee Terms of Reference; Reckitt
Benckiser Group plc Articles of Association; past Board and Committee
Effectiveness Review summaries; the latest Annual Report and
Sustainability Report; and company announcements on Interim Results
and Strategy presentations.
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 N O M I N AT I O N C O M M I T T E E R E P O R T C O N T I N U E D

During Jeff’s first months at Reckitt he immersed himself within the Margherita Della Valle received a tailored induction following her
business, through attending employee town halls, results presentations appointment to the Board. She attended virtual meetings with the CEO,
and investor roadshows. Jeff brings extensive experience across CFO and General Counsel & Company Secretary. Margherita also had
consumer and retail companies and has a strong record of meetings with the Presidents of the three GBUs, to provide her with
transformational strategic and operational leadership, consistent greater insight of the business and how it operates. Margherita is a
performance delivery, strong capital allocation discipline and building member of the Audit Committee and had meetings with key individuals
strong teams; all of which lead to longer-term shareholder value in Reckitt’s, Finance, HR, Investor Relations and Corporate
creation. Jeff has made a great contribution to Reckitt already and we Communications and SQRC teams, in addition to receiving presentations
look forward to his future success in the role. on topics covered in all Director inductions, such as tax, Internal Audit
and strategy. Margherita also met with KPMG’s Lead Audit Partner.
Non-Executive Director succession planning
Olivier Bohuon received a tailored induction following his
During the year the Committee conducted a search for new Non-
appointment to the Board. He attended virtual meetings, where he
Executive Directors to diversify the skills and expertise of the Board.
had the opportunity to meet with the CEO, CFO and General Counsel &
The Committee identified specific desirable skills in the search for new
Company Secretary. He also met with each of the Presidents of the three
Non-Executive Directors, including, the need for individuals with financial
GBUs. His induction further included meetings with members of the GEC,
expertise and experience as UK-based operating leaders within public
including the Chief Transformation Officer, Chief Supply Officer, Chief
limited companies.
Human Resources Officer, Chief R&D Officer and Head of Corporate
We instructed Egon Zehnder International Ltd to carry out the search
Affairs & Chief Sustainability Officer. Olivier is a member of the
for new Non-Executive Directors. Upon their recommendation we
Remuneration Committee and had discussions with Mary Harris, Chair
reviewed a list of candidate profiles and I had exploratory meetings
of the Remuneration Committee and the Group Head of Reward.
with potential candidates who were considered a good fit for Reckitt,
Both Non-Executive Director inductions covered legal compliance
in terms of international experience, skills, culture and diversity ahead
matters, including, a discussion on Directors’ Duties and Liabilities,
of recommending for further consideration. After shortlisting potential
disclosure of Conflicts of Interest and Persons Closely Associated, MAR
candidates, this was followed up by individual meetings with each of
and Reckitt’s Share Dealing Code. The Directors received copies of the
the Committee members, the CEO (who is a Committee member)
Board and Committee Terms of Reference; Reckitt Benckiser Group plc
and the CFO.
Articles of Association; past Board and Committee Effectiveness Review
On 23 June 2020, Margherita Della Valle was appointed as a
summaries; the latest Annual Report and Sustainability Report; and
Non-Executive Director on recommendation of the Committee.
Reckitt’s company policies.
Margherita brings recent and relevant financial experience within the
In previous years, ad hoc site visits for newly appointed Directors
consumer goods sector to the Board, having held the position of Chief
have been arranged to the Group’s operations to gain an insight into the
Financial Officer at a large international public limited company. It was
business, and usually form part of the annual Board meeting cycle. We
decided, based on Margherita’s expertise, that she would join as a
aim to have one Board strategy meeting held at an off-site business
member of the Audit Committee on her appointment to the Board.
location each year. The 2021 off-site meeting will be considered with
On 17 December 2020, we announced that Olivier Bohuon would be
due regard to COVID-19 travel restrictions and the safety of our Board.
appointed as a Non-Executive Director with effect from 1 January 2021.
The Chairman has overall responsibility for ensuring that the Directors
The Committee agreed that Olivier would be a good fit for Reckitt in
receive suitable training to enable them to carry out their duties. As part
terms of international experience and pharmaceutical expertise. Olivier
of their role, Directors are also expected to personally identify any
is a successful leader, with many years of experience as CEO of a large
additional training requirements they feel would benefit them in
global company. He brings to the role deep experience in healthcare
performing their duties to the company. Ongoing training arranged by
products and markets, which will add great insight to the Board.
the company covers a wide variety of sector-specific and business
On appointment it was announced that Olivier would join the
issues, as well as legal and financial regulatory developments relevant
Remuneration Committee.
to the company and the Directors. Training is also provided by way of
During the recruitment process, the Committee followed a formal,
briefing papers or presentations at each scheduled Board meeting, as
rigorous and transparent assessment with due regard to diversity, skills,
well as meetings with senior executives or other external sources.
knowledge and level of experience. All potential candidates are
considered with regard to potential conflicts of interest and Renewal of existing Board members
consideration of the level of time required for other appointments, Non-Executive Director appointments are generally made for three-year
in making recommendations to the Board. As a Committee we will terms. During the year, the Committee considered the renewal of
continue to regularly review and refresh the Board where appropriate. existing Non-Executive Directors. Details of the specific reasons each
Director contributes to and continues to be important to Reckitt’s
Director induction, training and development
long-term success are set out in the Notice of Annual General Meeting
Reckitt has a comprehensive induction programme for new Directors.
(AGM), available at www.reckitt.com
The programme covers Reckitt’s business, legal and regulatory
The Committee recommends that all existing Board members have
requirements of Directors and includes one-to-one presentations from
their appointments renewed, and as such, resolutions to this effect will
senior executives across the Group covering topics such as strategy,
be proposed to Shareholders for approval at the forthcoming AGM.
investor relations, taxation, Internal Audit, CRSEC Committee matters,
supply and the company’s three Global Business Units – Health, Hygiene
and Nutrition and eRB/Greater China. The induction programme has
several aims and serves multiple purposes. It provides new Directors
with an understanding of Reckitt, its businesses and the markets and
regulatory environments in which it operates, provides an overview of
the responsibilities for Non‑Executive Directors of Reckitt and builds links
to Reckitt’s people and stakeholders. Incoming Board members will also
have legal due diligence meetings and an open offer to meet with the
Group’s External Auditor.

116 Reckitt Annual Report and Accounts 2020

 S T R AT E G I C R E P O R T G OV E R N A N CE
Group Executive Committee (GEC) changes
A number of new appointments were made throughout the year to
strengthen the GEC and the representation of key Reckitt functions at
GEC level; we are pleased with the progress that has been made. At the
beginning of the year, following the departure of Gurveen Singh, the
Committee was pleased to welcome Ranjay Radhakrishnan as Chief
Human Resources Officer (and GEC member). Throughout the year
Ranjay has made significant contributions to Reckitt, leading the HR
function and our employees through the challenges presented as a
result of COVID-19. Ranjay has ensured that all employees are supported
by the HR function and have access to important advice and guidance.
To further ensure the correct balance of skills and experience at GEC
level, we also announced the promotions of Zephanie Jordan, Chief
SQRC Officer, and Miguel Veiga-Pestana, Head of Corporate Affairs &
Chief Sustainability Officer, as members of the GEC. Miguel joined
Reckitt in 2017 and has made significant contributions to the company;
he has played a fundamental role in the creation of our new fight and
purpose, and the launch of our new strategy in February 2020. We are
delighted that Miguel will represent the importance of our Corporate
Communications and Sustainability function as a member of the GEC.
As mentioned previously, regretfully Zephanie has now left the
Committee. Zephanie played an important role as a member of the GEC
throughout the year; she championed our product safety, compliance,
health and safety, quality, regulatory, remediation and operations agenda
as a cornerstone of our transformational and sustainable growth journey.
Zephanie has created a talented, capable and high-performing team.
The Committee is extremely grateful for her contribution. Since January
2021, the Regulatory, Global Safety Assurance and SQRC Operational
Excellence team has moved to R&D under Angela Naef’s leadership and
the Quality Compliance team has moved to Supply Chain under Sami
Naffakh’s leadership.
Following the announcement last year that Mike Duijser, former Chief
Supply Officer, had left Reckitt, we announced that Sami Naffakh had
joined Reckitt as Chief Supply Officer (and GEC member). Sami is a
skilled and experienced supply leader and was previously Executive Vice
President at Arla Foods, the Danish farmer-owned dairy cooperative.
Sami has experience in fast-moving consumer goods companies such
as Unilever, Danone and Estee Lauder, as well as Reckitt, where he held
several leaderships positions from 2003 to 2009. Throughout this year the
COVID-19 pandemic has highlighted more than ever the importance of
our supply chains in ensuring we are able to provide our products to
those who need them. We are delighted that this critical function will
be led by Sami and are positive he will contribute greatly to this role.
To further create a strong and dynamic GEC, we announced in
August 2020, that Volker Kuhn had joined Reckitt and as a member
of the GEC as Chief Transformation Officer. Volker has a strong track
record of leading successful business turnarounds, growth initiatives and
transformations. He was previously VP Fabric Care, Europe and Global
Platform lead for single dose detergents at P&G. Volker’s experience in
the role has been fundamental to the transformation of Reckitt. In March
2021 we announced that Volker would assume the role of President
Hygiene on 1 May 2021, with Harold van den Broek leaving the business
on 31 May 2021. Volker has a wealth of experience across the fast-
moving consumer goods industry which makes him ideally suited for
this important leadership role. The Committee thanks Harold for his
outstanding contribution to Reckitt over the last seven years, and wishes
him much success for the future. Later in the year, we also announced
that Angela Naef had joined Reckitt as Chief R&D Officer and as a
member of the GEC. Angela’s appointment is critical towards our
commitment to invest in science to better scale, leverage and
accelerate our innovation pipeline, which is also essential to unlocking
our strategy of ‘Rejuvenating Sustainable Growth’. Angela is a highly
skilled leader and has a strong track record of accelerating innovation
in the areas of food, nutrition science and biotechnology. Angela joins
Reckitt from DuPont where she spent 10 years in various technical and
commercial leadership roles. We are pleased to have Angela and Volker
Reckitt Annual Report and Accounts 2020
F I N A N C I A L S TAT E M E N T S
as members of the GEC and look forward to their success. On 1 April
2021 Filippo Catalano will join Reckitt and the GEC as Chief Information &
Digitisation Officer. Building and maintaining competitive, leading-edge
IT and digital capabilities are key for Reckitt to be successful and agile.
Developing our IT and Digital Function will be the backbone and engine
of growth of Reckitt. Filippo has extensive leadership experience in IT,
digital portfolios and technology. We are confident that Filippo will add
great value to the role and develop an effective and successful function.
More information about our current GEC membership can be found
on pages 99 to 101.
Review of potential conflicts of interest
During the year the Committee reviewed Board members’ potential
conflicts of interest. The Committee reviewed a schedule of external
appointments and other potential situational conflicts as disclosed by
each Director. Having reviewed the schedule, the Committee concluded
that the appointments did not affect any Director’s ability to perform his/
her duties and recommended that the Board authorises each Director to
continue in each of his/her external commitments.
We acknowledge that Sara Mathew sits on three external Boards, one of
which being a chair position for a listed US company. The Committee has
assessed and is satisfied that Sara is able to dedicate sufficient time to
her role and will continue to monitor her time devoted to the position to
ensure this remains appropriate. Each Director standing for election or
re-election at the forthcoming AGM of the company has individually
provided assurances that they remain committed to their roles and can
dedicate sufficient time to perform their duties.
Governance
Committee evaluation
This year, the Committee participated in the main Board internal
evaluation, conducted by Lintstock Ltd, appointed to facilitate a
three-year Board Development Programme. Respondents in the
Committee questionnaire scored the Committee highly in key areas,
specifically noting the composition of the Board was effective. The main
area of focus relevant to the Committee, identified as a result of the
evaluation, is to continue to identify additional skills required for the
Board in areas that may be lacking and to ensure succession planning
remains a high priority for key Board roles over a longer-term horizon.
The Board evaluation is discussed in further detail on page 110. Lintstock
is independent of and has no other links with the company or its
Directors in connection with the evaluation.
Review of Committee terms of reference
At the Committee’s November meeting, we reviewed our terms of
reference and proposed minor changes in line with best practice
guidance and the model terms of reference for Nomination Committees
issued by the Institute of Chartered Secretaries and Administrators. The
revised terms of reference were approved by the Board in November
2020 and can be found on our website at www.reckitt.com. We review
our terms of reference annually.
Designated Non-Executive Director
Mary Harris is Reckitt’s Designated Non-Executive Director, for
engagement with the company’s workforce in line with the provisions of
the Code. Mary oversees the Board’s engagement with the company’s
workforce in partnership with Laxman, HR and the Communications team
to understand more about engagement and the culture of the company.
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During the year, Mary has been involved in key conversations with the Following the recent GEC changes, at 31 December 2020, female
workforce. As part of the September 2020 Board meeting schedule, representation within the GEC (and their direct reports) was 32%.
individual Directors and the change to General Counsel & Company Whilst progress has been made, we are cognisant of the gap in
Secretary paired up to hold virtual roundtable sessions with small groups performance towards the 33% target for female leadership within the
of Reckitt employees to listen to their views of working at Reckitt and its GEC and their direct reports as detailed in the Hampton-Alexander
culture, purpose and mission and to listen to employees’ ideas as to what Review (and in provision 23 of the Code), and we are working to improve
could be improved. The Reckitt employees selected to participate in the gender balance amongst our senior management. We recognise that
sessions reflected a diverse range of organisational levels, tenures at female representation at GEC level and within senior management
Reckitt, nationalities and styles. Following these meetings, each pairing roles needs improvement and the Committee continues to make a
provided feedback to Mary on what had been discussed during their commitment to increase female representation at this level. We also
roundtable session, who in turn fed this back to the Board. Further details recognise the importance of developing talent internally for senior
on Mary’s work during the year as Designated Non-Executive Director for management positions, and note that during the year promotions to the
engagement with the company’s workforce can be found on page 59. GEC were made from our internal pool of talent, with the appointments
of Miguel Veiga-Pestana and Zephanie Jordan to the roles of Head of
Inclusion and diversity
Corporate Affairs & Chief Sustainability Officer and Chief SQRC Officer
The Board and Committee fully recognise the importance of diversity,
respectively. As previously stated, Zephanie Jordan is leaving the
including gender and ethnicity, at Board and senior management level
company in 2021 for personal reasons. Across wider global leadership
in compliance with the Code. Inclusion is core to Reckitt’s purpose
roles, we promoted 8 employees internally.
of ‘Protect, Heal and Nurture in the relentless pursuit of a cleaner and
Our Group diversity policy can be found at www.reckitt.com/
healthier world’ and to our employee value proposition of Freedom to
responsibility/people-and-culture/diversity-and-inclusion/. We are
Succeed – there is no freedom without inclusion and no success without
committed to equality of opportunity in all areas of employment and
diversity. We recognise that it is critical for us to have a diverse employee
business, regardless of personal characteristics. We always recruit the
population and also a Board and senior management team that is
best and most suited candidates for any role, and we strive for a
reflective of the markets we operate in and the consumers we serve.
well-balanced representation of backgrounds, nationalities, cultures,
We do not have a written Board diversity policy, but the Committee
skills and experiences, at all levels across the Group. Ultimate
and the Board are committed to recruit members of the Board on the
responsibility and sponsorship for this policy rests with the GEC. Senior
strict criteria of merit, skill, experience and cultural fit of any potential
management is accountable, and all Reckitt employees are responsible,
candidates, and to seek diversity of gender, social and ethnic
for ensuring that our diversity policies and programmes are actively
backgrounds, cognitive and personal strengths. This commitment is
implemented and followed.
demonstrated by the composition of the Board, which comprises five
We continue to put inclusion and diversity at the core of everything
nationalities, and five women, two of whom are Committee Chairs.
we do. Further details can be found in our stakeholder engagement
I am pleased to report that as at 31 December 2020 45% of our Board
section from page 58.
members are women, which exceeds the original 25% target set by the
Davies Report and we have achieved the 33% target by 2020, set out by
Lord Davies, and subsequently outlined in the Hampton‑Alexander
Review. Following the appointment of Olivier Bohuon on 1 January,
female representation on the Board is 41%, still exceeding the Davies
Report target. We also meet the requirements of the Parker Review
published in October 2017. Our Board consists of three members from
ethnic minorities, which exceeds the Parker Review target to have at
least one person from an ethnic minority on the Board.
Our GEC, comprising of the most senior management level in the
business, represents eight different nationalities from across the globe,
embodying our corporate inclusion and diversity policy. Our GEC also
consists of three members from ethnic minority backgrounds. The
company’s wider global leadership community holds over 17 nationalities
between them, representing a broad background of collective skills,
cultures and experience. This widens our understanding of our
consumers, who themselves come from the broadest possible
backgrounds, allowing us to be best placed in serving their needs.

118 Reckitt Annual Report and Accounts 2020

 S T R AT E G I C R E P O R T G OV E R N A N CE F I N A N C I A L S TAT E M E N T S

AU D IT CO M M IT T E E R E P O RT

On behalf of the Board, I am pleased to

present the Audit Committee Report for
the financial year ended 31 December 2020.
This report details how the Committee has discharged its role, duties
and performance during the year under review in relation to internal
control, financial and other reporting, risk management, the internal audit
function and our relationship and interaction with the External Auditor.
2020 was a year where Reckitt made progress towards sustainable
growth. Whilst the COVID-19 pandemic contributed to the Group’s
strong financial performance during the year, challenges and disruption
arose from the uncertainty caused by COVID-19. For example, ensuring
supply continuity, workforce management and keeping our people safe,
at the same time as facing increased demand for our products. The
effect of these challenges and disruption was also reflected in the
Committee’s activities during the year, for example, in relation to
reviewing the valuation and resultant impairment of goodwill and
indefinite life intangible assets relating to IFCN and increased trade
spend accruals due to high volumes.
Reckitt’s global Finance teams were able to overcome the
challenges of social distancing restrictions and working remotely,
with no major impacts to systems, financial reporting or internal
controls. Changes were required to the Internal Audit annual work
plan from March onwards, with the Internal Audit team adapting
and developing their remote working practices, owing to their
inability to travel to conduct on-site audits. To ensure adequate
assurance, on-the-ground resource was co-sourced from local
PwC LLP offices to follow up on any internal audit findings. The
Internal Audit and Corporate Control teams worked closely to
ensure continuity in the provision of assurance to the Committee
and Board on the effectiveness and resilience of internal controls in
light of the changing operational, financial and economic climate.
In February 2020, the Financial Reporting Council (FRC) issued
guidance to listed companies regarding COVID-19 disclosures. A joint
statement by the FRC, Financial Conduct Authority (FCA) and Prudential
Regulation Authority was issued in March 2020 (Joint Statement)
recommending corporate reporting changes, including a two-month
extension to listed company annual report publication. The Committee
considered the recommendations of the Joint Statement, and in doing
so, took into account its work in reviewing COVID-19 risks on business
Continuing our focus on internal operations, going concern and viability statement assessments and
discussions with our External Auditor. Further guidance was published by
controls, the risk management the FRC on 4 December 2020, emphasising that the recommendations of
framework and monitoring the progress the Joint Statement remain. The December 2020 guidance also provides
recommendations regarding risk management and internal control,
of key transformational programmes to dividends, the strategic report, viability statement and financial
mitigate risks to the Group. statements. We continue to monitor the COVID-19 impact on the
Group’s financial position and reporting and to consider the regulatory
Andrew Bonfield perspective and any further guidance issued by the FRC.
Chair of the Audit Committee The effect of COVID-19 has introduced a new risk to the Group and,
as a result, a specific COVID-19 risk assessment with risk mitigations was
produced. Additionally, given remote working as a result of COVID-19,
the Corporate Control team took action to ensure appropriate internal
controls were maintained and, where appropriate, controls were
enhanced or additional monitoring controls were implemented.
Non-essential activities and projects were reviewed and paused where
appropriate, to prioritise business continuity.
The Committee had a detailed annual standing agenda of matters to
be considered and reviewed based on its terms of reference. In addition
to the work arising from the pandemic, during 2020, these included
focused reviews in the following areas: risk assurance mapping; delivery
of transformation programmes; IT controls; legal and compliance risk,
including whistleblowing activity; and taxation matters.

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 AU D IT CO M M IT T E E R E P O RT CO N T I N U ED
The Committee also considered many other matters outside its annual
standing agenda, such as: the status and governance of transformation
programmes; the impact of COVID-19 on going concern, liquidity, risk
and internal controls; renewal of Group insurance; and the maturity of the
Group’s internal controls framework. Further detail on our activity during
the year can be found on page 123.
During the year, a number of transformation programmes were either
implemented or progressing well, in areas such as productivity, product
lifecycle management and IT systems. To help oversee and prioritise
major strategic investments resulting from savings generated from our
productivity programme, an investment board was created, which
meets monthly, reporting into the Group Executive Committee. A
transformation portfolio review board has also been established, to
oversee the delivery of several key transformation programmes and the
management of priorities and constraints. We received regular reports
from the Transformation team regarding transformation programme
progress, highlighting any new risks identified and providing assurance
that the programmes were on track.
We carried out our annual ‘deep dive’ of the company’s major risk
assessment process, which identifies and prioritises the principal and
emerging strategic risks and uncertainties which may affect the Group,
how they can be mitigated and whether they have increased, diminished
or remained the same, compared to the previous year. Looking at the
major risk assessment process is a key element of our review of the
effectiveness of Reckitt’s risk management and control systems
and identified risks are clearly and transparently reflected in our
communications to shareholders in the Annual Report. Details are
set out on pages 80 to 92.
The impact of Brexit was considered at our meeting in November
2020 as part of our annual tax update. A number of steps were taken to
plan for and mitigate any increased costs to the business or potential
disruption caused by a ‘no deal’ Brexit. Reckitt is taking all necessary
steps to comply with the Trade and Cooperation Agreement signed by
the UK and the EU; nearly all products traded between the UK and the EU
will qualify for the preferential tariff (0% import duty) so the additional
duty charge is not expected to be significant. Further information on this
risk can be found on page 92.
The Committee is responsible for the External Auditor’s effectiveness
and independence. KPMG LLP (KPMG) has been the company’s External
Auditor since shareholders passed a resolution to appoint KPMG at the
company’s AGM in 2018. A resolution to reappoint KPMG as External
Auditor for the 2021 financial year will be proposed at the AGM on 28 May
2021. Further details on our interaction with the External Auditor can be
found on pages 125 to 126.
120 Reckitt Annual Report and Accounts 2020
Committee priorities for 2021
• Maintaining oversight and reassurance to the Board on Reckitt’s risk
management and internal control procedures, including monitoring
key areas in the context of risk and control, such as IT, tax and legal
and compliance.
• Sustaining a strong culture of risk management across the Group.
• Receiving continued assurance from the Internal Audit function on
the impact of COVID-19 and any associated risks to the Group.
• Taking a proactive approach in anticipating and preparing for
legislative or regulatory changes which may be required to internal
controls and reporting, arising from reviews such as Kingman and
Brydon and the anticipated Department for Business, Energy &
Industrial Strategy (BEIS) consultation.
• Continuing to holistically monitor legislative and regulatory changes
which may affect the work of the Committee.
As I mentioned in my report last year, Warren Tucker retired as a Director
and member of the Committee at the company’s AGM on 12 May 2020,
when he did not stand for re-election. I would like to extend my thanks
to Warren for his service to the Committee during his tenure.
During the year, we strengthened the membership of the Committee
with the appointment of Margherita Della Valle on 1 July 2020. Margherita
holds a Masters degree in Economics from Bocconi University in Italy and
has extensive experience of financial markets and digital technologies.
Margherita is currently Chief Financial Officer of Vodafone Group Plc and
has held a number of senior finance roles at Vodafone since 1994,
including Group Financial Controller and Chief Financial Officer of
Vodafone’s European region. The Board and Committee believe that
Margherita’s appointment brings valuable insight, relevant financial and
sectoral expertise and challenge to the Committee.
I would like to acknowledge and thank my fellow Committee
members, Pam Kirby, Sara Mathew and Margherita Della Valle, for their
diligence and service throughout the year.
Andrew Bonfield
Chair of the Audit Committee
Reckitt Benckiser Group plc
15 March 2021
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Committee membership

Member from Meetings Recent and relevant financial experience Sectoral experience relevant
attended to Reckitt’s operations

Andrew Bonfield (Chair) July 2018 6/6 • Financial expert • Consumer goods
• Chartered Accountant • Pharmaceuticals/healthcare
• Currently CFO of a global US Fortune 100 company
• Has held numerous CFO roles at other large companies,
including those in the consumer goods sector
Pam Kirby March 2016 6/6 • Sits on another FTSE 100 company’s Audit Committee • Pharmaceuticals/healthcare
• Technology
Warren Tucker1 February 2010 4/4 • Financial expert • Manufacturing
to May 2020 • Chartered Accountant
• Has held senior finance roles at other large companies
• Sits on a FTSE 250 company’s Audit Committee
Sara Mathew July 2019 6/6 • Financial expert • Consumer goods
• Holds Master’s degrees in Finance and Accounting • Pharmaceuticals/healthcare
• Has held senior finance roles and CFO roles at other
large companies
Margherita Della Valle2 1 July 2020 0/2 • Financial expert • Consumer goods
• Acts as CFO for another FTSE 100 company • Technology
• Holds a Master’s degree in Economics
• Has held senior finance roles and CFO roles at other
large companies

There were four scheduled Committee meetings (three of which were held by videoconference owing to COVID-19) and two additional meetings (held by telephone) during the year.

1. As reported last year, Warren retired from the Board and Committee at the company’s AGM on 12 May 2020, where he did not stand for re-election. Warren was eligible to attend two
of the scheduled meetings and two of the additional meetings during the year
2. Margherita was eligible to attend two of the scheduled meetings during the year, having been appointed on 1 July 2020. Margherita was unable to attend both meetings owing to
prior commitments with Vodafone

The Chair of the Committee is a Chartered Accountant with recent and
relevant financial experience. He is currently Chief Financial Officer of
Caterpillar Inc. and has previously held CFO roles for other large companies.
All Committee members are independent Non-Executive Directors
who have financial, economics and/or business management expertise
in large companies. As Chair of the CRSEC Committee Pam Kirby’s
membership of the Audit Committee ensures that relevant issues, such
as risk, whistleblowing and compliance are shared and coordinated
between the two Committees. Committee members are expected in
particular to have an understanding of:
• the Group’s operations, policies and internal control environment;
• the principles of, and recent developments in, financial reporting;
• relevant legislation, regulatory requirements and ethical codes of
practice; and
• the role of internal and external auditing and risk management.
The Board is satisfied that, in compliance with the UK Corporate
Governance Code 2018 (the Code), Committee members as a whole
have competence relevant to the company’s sector (consumer goods).
The relevant financial and sectoral experience of each Committee
member is summarised in the table above.
Committee appointments are generally made for a three-year
period. Members of the Committee are appointed by the Board on
the recommendation of the Nomination Committee, which reviews
membership in terms of skills, experience, knowledge and diversity of
gender, social and ethnic backgrounds, cognitive and personal strengths.
On joining the Committee and during their tenure, members receive
additional training tailored to their individual requirements. Such training
includes meetings with management covering internal audit, risk
management, legal, tax, treasury and financial matters as well as
meetings with the External Auditor.
All members of the Committee receive regular briefings from
management on matters covering governance and legislative
developments, accounting policies and practices and tax and treasury.
During the year, the Assistant Company Secretary acted as Secretary
to the Committee. With effect from 31 December 2020, the Head of
Group Secretariat was appointed as Secretary to the Committee.
Meetings
During 2020, the Committee held four scheduled meetings at times
aligned to the company’s reporting cycle and two additional meetings.
Of the six meetings held during the year, five were held via either
telephone or videoconference, as permitted by the company’s Articles
of Association and the Committee’s Terms of Reference, owing to
COVID-19-related restrictions. Committee meetings usually take place
ahead of Board meetings and the Committee Chair provides an update
to the Board on the key issues discussed at each meeting. Committee
papers are provided to all Directors in advance of each meeting,
including a copy of the minutes of the previous meeting(s).
Meetings are attended by senior representatives of the External
Auditor, the Group Head of Internal Audit, Chief Financial Officer (CFO)
and SVP Corporate Controller. The Chairman of the Board and the Chief
Executive Officer are also invited to attend. Other management attend
when deemed appropriate by the Committee. Time is allocated at the
end of each meeting for private discussion with the Internal and External
Auditors without other invitees being present, as well as a private
session of the Committee members. Committee member meeting
attendance during the year is set out in the table on page 106.

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 AU D IT CO M M IT T E E R E P O RT CO N T I N U ED
Role and responsibilities
The Committee is part of the Group’s governance framework and
supports the Board in fulfilling its oversight responsibilities in ensuring
the integrity of the Group’s financial reporting, internal controls and
overall risk management process and relationship with the company’s
External Auditor. There were no significant changes to the Committee’s
role and responsibilities during the year. The Committee’s role and
responsibilities are set out in its terms of reference, which are available
on our website at www.reckitt.com
Committee meetings cover matters set out in its terms of reference
related to the reporting and audit cycle, including: half- and full-year
results; Internal and External Audit work plans and reports; and regular
updates from financial management and the External Auditor.
The Committee’s responsibilities include, but are not limited to, the
following matters.
Financial and other reporting matters
• Monitoring the integrity of the Group Financial Statements including
annual and half-yearly reports, interim management statements,
preliminary announcements and any other formal announcements
relating to the company’s financial performance.
• Reviewing and challenging, where necessary, the actions and
judgements of management before submission to the full Board,
paying particular attention to: the clarity and completeness of
financial reporting disclosures; the application and appropriateness
of significant accounting policies; methods used to account for
significant or unusual transactions; whether judgements and
estimates are appropriate; the assumptions in support of the going
concern statement; and significant adjustments resulting from the
External Audit.
• As requested by the Board, reviewing the content of the Annual
Report and Financial Statements and advising the Board on whether,
taken as a whole, they are fair, balanced and understandable and
provide the information necessary for shareholders to assess the
company’s position, performance, business model and strategy and
whether they inform the Board’s statement in the Annual Report on
these matters that is required under provision 25 of the Code.
• Reviewing all material non-financial information presented in the
Annual Report and Financial Statements, such as the Strategic Report
and the Corporate Governance Statements, insofar as it relates to
activities or functions within the Committee’s remit.
• Reviewing and approving the statements to be included in the
Annual Report concerning internal control, risk management, going
concern and the Viability Statement.
• Receiving updates on accounting matters, including consideration
of relevant accounting standards, underlying assumptions and the
impact of changing or adopting new accounting standards.
• Considering significant legal claims and regulatory issues.
Risk management and internal controls
• On behalf of the Board, overseeing and ensuring that the assessment
process for the Group’s principal and emerging risks is robust and of
a high quality, that procedures are in place to identify emerging risks
and considering the company’s response to identified risks.
• Advising the Board on the Group’s current risk exposure and future
risk strategy.
• Reviewing and monitoring, on behalf of the Board, the Group’s
internal financial controls and systems and, at least annually, carrying
out a review of its effectiveness and reviewing and approving the
statement to be included in the Annual Report concerning internal
risk management.
• Ensuring that appropriate procedures are in place for the detection of
fraud, prevention of bribery and secure whistleblowing arrangements
by which the workforce may raise concerns including possible
wrongdoings in matters of financial reporting and financial controls.
122 Reckitt Annual Report and Accounts 2020
Internal Audit
• Monitoring and assessing the effectiveness of the Internal Audit
function, including its role and mandate, assessing the effectiveness
of its work and satisfying itself that the function has the requisite
skills, expertise and standing within the Group.
• Reviewing Internal Audit activities, significant recommendations and
findings and related management actions.
• Assessing and approving Internal Audit’s annual work plan to ensure
it is aligned to the key risks of the Group and receiving reports on
progress.
• Ensuring that the Internal Audit function has unrestricted scope, the
necessary resources and appropriate access to information to enable
it to perform effectively.
External Audit
• Overseeing the relationship with the External Auditor, negotiating
and agreeing their terms of engagement and their remuneration to
ensure that the level of fees is appropriate to enable an effective
and high-quality audit to be undertaken.
• Annually reviewing and assessing the External Auditor’s processes for
maintaining its independence, objectivity and effectiveness, taking
into account relevant UK law, the Ethical Standard and other
professional and regulatory requirements.
• Evaluating annually the performance of the External Auditor and
making recommendations to the Board to put to shareholders for
their approval at the AGM regarding the appointment, reappointment
or removal of the External Auditor.
• Discussing with the External Auditor factors that could affect audit
quality.
• Receiving the annual audit plan and receiving the External Auditor’s
findings and reports on the annual audit and interim review.
• Meeting with the External Auditor following each formal Committee
meeting without management being present, to review and discuss
the External Auditor’s remit and the findings of the audit including
(but not limited to) any major resolved or unresolved issues arising
from the audit, the External Auditor’s explanation of how risks to audit
quality were addressed, key accounting and audit judgements, the
External Auditor’s view of their interactions with management and
levels of errors identified during the audit.
• Considering communications from the External Auditor on audit
planning and findings on material weaknesses in accounting and
internal control systems that come to the External Auditor’s attention,
including a review of material items of correspondence between the
company and the External Auditor.
• Developing, implementing and keeping under review the policy on
non-audit services provided by the External Auditor, considering
relevant ethical guidance and the impact this may have on
independence.
• Agreeing with the Board the Group’s policy for the employment of
former employees of the External Auditor, taking into account the
FRC Ethical Standard and legal requirements and monitoring the
application of this policy.
• At the end of the audit cycle, assessing the effectiveness of the
External Audit process.
• Monitoring the rotation of the External Audit lead partner and
managing the competitive tendering process of the External Audit
services contract, ensuring a competitive tender is conducted at
least once every ten years.
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Activity during the year
Standing agenda items reviewed by the Committee throughout
the year
• Received reports from the SVP Corporate Controller, Internal Auditor
and External Auditor.
• Considered tax and treasury matters, including provisioning and
compliance with statutory reporting obligations.
• Considered legal matters, including provisioning and compliance risk.
• Kept abreast of changes in financial reporting and governance
matters by way of technical updates throughout the year.
• Received focused risk and control reviews concerning the delivery of
transformation programmes (in particular, in the areas of: deployment
of IT systems; shared services; legal entity restructuring; product
lifecycle management; and productivity in relation to procurement,
manufacturing and marketing); risk assurance mapping; IT risk; legal
and compliance risk; and tax risk.
• Monitored the Group’s risk assessment processes.

Other items considered by the Committee at meetings during the year

Meeting Key items considered

February 2020 • Results of annual impairment testing
• 2019 preliminary results, draft unaudited Financial
Statements and related announcement and
recommendation for approval by the Board
• Going concern and Viability Statement
• KPMG’s 2019 audit findings report and draft
management representation letter
• KPMG’s final non-audit fees for 2019
• KPMG’s assessment of its objectivity and
independence
February 2020 (additional) • Draft 2019 preliminary results announcement and
recommendation for approval of the draft
unaudited Financial Statements by the Board
March 2020 (additional) • KPMG’s observations of Reckitt’s internal controls
for the 2019 financial year, including their report on
the 2019 Annual Report and Financial Statements
• Whether the Committee could recommend that
the Board approve Reckitt’s 2019 Annual Report
and Financial Statements
May 2020 • COVID-19 impact on liquidity, risk and control
• 2020 half-year Internal Audit plan revisions
• Update on Integrated Risk Management Framework
status
• KPMG’s 2020 audit strategy and plan
• KPMG’s draft engagement letter and proposed
2020 audit fees
July 2020 • Half-year results announcement, including the
going concern basis of preparation, and
recommendation for approval by the Board
• KPMG’s half-year review report findings to 30 June
2020 and draft management representation letter
• Approval of KPMG’s 2020 audit fees
November 2020 • The Committee’s 2021 standing agenda
• The Committee’s terms of reference and
recommendation to the Board for approval
• Results of effectiveness reviews of the Committee
and the Internal Audit function
• Annual Tax function ‘deep dive’
• Annual review of Group Treasury Policies
• Work undertaken in respect of the 2019 Internal
Audit plan and approval of revisions to 2020
half-year Internal Audit plan
• Annual review of risk management and internal
controls, including developments undertaken in
2019 and in-depth review of risks across each of
the Group functions and associated controls
• Integrated Risk Management Framework
• KPMG’s updated 2019 audit findings report
• KPMG’s audit opinion
• Going concern and Viability Statement
considerations arising from COVID-19
• Changes required to operating segments (IFRS 8)
reporting as a result of the Group reorganisation on
1 July 2020
• Review and approval of revised Risk Management
policy
• ‘Speak Up’ whistleblowing facility
• 2020 full-year Internal Audit plan revisions
• Annual review of IT general controls, cyber security
and IT operations
• Group insurance renewal proposal
• KPMG’s interim IT control findings relating to
the 2020 audit cycle and audit strategy update
• 2021 Internal Audit plan covering the first half
of 2021
• Internal controls, maturity assessment and roadmap

Significant and key financial reporting matters • reviewing the appropriateness of the accounting policies,
The key matters reviewed and evaluated by the Audit Committee during judgements and estimates used as set out on page 179 and
the year were as follows. concluding that the judgements and assumptions used are
reasonable.
Accounting and financial reporting
The Audit Committee is responsible for reviewing and approving the Areas of significant financial judgement
appropriateness of the interim and annual Financial Statements and The significant financial judgements and complex areas in relation to the
related announcements, including: 2020 Group Financial Statements considered by the Committee,
• recommending that, in the Committee’s view, the Financial together with a summary of the actions taken, were as follows:
Statements are fair, balanced and understandable. In addition to the
detailed preparation and verification procedures in place for the 2020
Annual Report and Financial Statements, management continued its
focus on narrative reporting and clear written and visual messaging
to communicate the Group’s strategy; and

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 AU D IT CO M M IT T E E R E P O RT CO N T I N U ED
Impairment assessments
Under International Financial Reporting Standards (IFRS), goodwill and
indefinite life assets must be tested for impairment on at least an
annual basis.
As in prior years, management performed this testing over the course
of late 2020 and early 2021. The testing utilised cash flow projections
included within one-year budgets and three- to five-year strategic
plans. Cash flows beyond the five-year period were projected using
steady or progressively decreasing growth rates, followed by terminal
growth rates.
Impairment testing is inherently judgemental and requires
management to make multiple estimates, for example around future
price and volume growth, future margins, terminal growth rates and
discount rates.
As a result of the 2020 testing, management recorded a £1bn
impairment charge in relation to IFCN goodwill.
In February 2021, the Audit Committee reviewed the detailed
results of the 2020 testing in relation to IFCN, and challenged the
key assumptions which underpinned the IFCN recoverable amount
at 31 December 2020, including: Net Revenue growth assumptions;
productivity savings expected in future periods; the effect and
duration of the COVID-19 pandemic, the resultant recession and the
impact on birth rates; the duration of cross-border trade restrictions
between Hong Kong and mainland China; and new product
launches, including adult nutrition, and the expansion of specialty
nutrition. The Committee also reviewed the discount rate used by
management to calculate the value in use of IFCN, in particular the
60bps increase in the discount rate in 2020 to reflect the volatility
relating to COVID-19 and the uncertainty this creates. The Committee
confirmed the key judgements and estimates made by management
(see Note 9 for further details) and reviewed the sensitivity of
impairment models to reasonable changes to key assumptions.
Following the £1bn impairment of IFCN goodwill, no headroom
remained between the IFCN recoverable amount and net book value.
As required under IFRS, management has included disclosures in the
Financial Statements in relation to its impairment assessment, including
key estimates underpinning the IFCN recoverable amount and the
sensitivity of the recoverable amount to reasonable changes in key
assumptions. The Committee has reviewed these disclosures, included
within Note 9, and considers them appropriate.
Trade spend accruals
Trade spend remains a significant cost for the Group, and the main
judgements relate to trade accruals, specifically the timing of recognition
of accruals for trade spend and the increased uncertainty and
judgement, which was required in the estimation of these trade spend
accruals, as the COVID-19 pandemic progressed. The Committee
reviewed the trade spend accruals in light of the global COVID-19
situation which has caused significant variability in demand for certain of
the Group products and has led to changes in the timing and extent of
promotional activities during the year. The Committee focused on the
level of trade spend accruals at the year end to ensure they are sufficient
and appropriate.
Tax provisioning
From time to time, the Group may be involved in disputes in relation to
ongoing tax matters in a number of jurisdictions around the world where
the approach of the local authorities is particularly difficult to predict.
The level of provisioning for these investigations is an area where
management and tax judgement are important. The Committee
debated the key judgements made with management, including
relevant professional advice that may have been received in each case,
and considers the level of tax provisions recognised and the associated
disclosures to be appropriate.
124 Reckitt Annual Report and Accounts 2020
Legal liability provisioning
At 31 December 2020, a provision of £232m (2019: £151m) was held on
the Group’s Balance Sheet in relation to regulatory, civil and/or criminal
investigations as well as litigation proceedings including a provision
in respect of the South Korea Humidifier Sanitizer (HS) and the US
Department of Justice (DoJ) issues. The Board has reviewed with the
change to General Counsel & Company Secretary the status of potential
legal and constructive liabilities during the year and at the year end in
relation to the HS issue, including the recent changes in HS legislation
in South Korea. The Committee challenged management on legal
judgements made in determining the level of provisions recognised and
was satisfied with the level of provisioning and associated disclosure.
Going concern and Viability Statement
A viability review was undertaken by management, encompassing
its going concern review. The Committee reviewed and challenged
the key assumptions used by management in its viability review and
going concern assessment, as well as the scenarios applied and risks
considered, including the risks associated with COVID-19. Based on
its review, the Committee considers that the application of the going
concern basis for the preparation of the Financial Statements was
appropriate and confirmed the suitability of the Viability Statement
covering a five-year period, as set out on page 93. The use of a five-year
period for the viability review was approved by the Board in 2020 as it is
the period of the Group’s long-term forecasting process and covers the
various business cycles.
Risk management and internal control
In monitoring the adequacy and effectiveness of the system of risk
management and internal controls, the Committee reviewed compliance
procedures and Reckitt’s overall risk framework (including the Group’s
whistleblowing arrangements) and considered financial, operational risk
and internal control processes at Group, Global Business Unit, corporate
and functional levels. There were no significant failings or weaknesses
during the year meriting disclosure in this report. The Committee
reported to the Board in February 2021 that it considers the internal
control framework to be functioning appropriately, to enable the
Board to meet its obligations under section 4 of the Code, to maintain
sound risk management and internal control systems and to report to
shareholders on these in the Annual Report (see pages 111 to 112). The
Committee also reviewed the three lines of defence framework and
the Group’s principal and emerging risks.
Internal controls
In conjunction with the Internal Audit team, the Corporate Control team
identifies financial risks and mitigates these with appropriate internal
controls, as well as establishing the minimum expected financial control
requirements, applicable across the whole of Reckitt.
The global financial controls framework is reviewed annually.
Reckitt’s internal control frameworks provide assurance that business
objectives are achieved, that business is conducted in an orderly manner
and in compliance with local laws, that records are accurate, reliable
and free from material misstatement, and that risks to Reckitt’s assets
are minimised.
The Corporate Control team is accountable for managing global
control policies and frameworks and for monitoring the effectiveness
of the Group’s internal control environment. Local markets conduct an
annual controls self-assessment, comprised of over 150 system-agnostic
controls across key financial processes. Corporate Control is responsible
for implementation of controls reporting and monitoring at local, Global
Business Unit and global levels, working with markets to improve risk and
controls capability and to support the development of remediation plans
and corrective actions for control weaknesses. The Committee receives
a report at each meeting summarising any controls activity since the
previous meeting.
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Controls are monitored through, for example, regular Balance Sheet
reviews with countries/markets and analytics, global financial controls
framework submissions and monthly calls to review the status of controls.
Corporate Control commenced a number of projects during the year,
such as the automation of a number of manual controls by leveraging
available technology and building controls capability; undertaking a
readiness assessment and preparation of a proposal for compliance in
anticipation of new legislation being implemented following the Kingman
and Brydon reviews; and, with the Internal Audit team, the creation of a
COVID-19-specific risk assessment to mitigate risks surrounding
COVID-19.
Internal Audit
The Committee is responsible for reviewing and monitoring the
effectiveness of the Internal Audit function. The Group Head of Internal
Audit reports to the Chair of the Committee and to the CFO for
administrative matters and updates the Committee at each meeting.
The Internal Audit function is responsible for impartially assessing the key
risks of the organisation and appraising and reporting on the adequacy
and effectiveness of Reckitt’s risk management and internal controls
in financial, information systems and other business and operational
areas to develop and improve the effectiveness of the Group’s risk
management control and governance processes and strategies. The
independence of the Group Head of Internal Audit and the Internal Audit
function is considered as part of the annual Internal Audit effectiveness
review. Further details can be found on page 126.
The Internal Audit plan is prepared on a half-yearly basis under an
agreed cover and scope policy and reflects a risk-based approach
within the cover policy. Designated audit locations are determined at
the start of each year following a risk and control assessment of each
commercial and supply unit. Information systems, change programmes
and head office locations also fall within Internal Audit’s remit and are
subject to audit. Following each audit, findings are reviewed and
reported to management and to the Committee, together with
recommendations and updates. Resulting management actions
and progress are tracked until a report is satisfactorily closed.
Owing to the COVID-19 pandemic, it was necessary to adapt the
Internal Audit approach and plan for the second half of 2020 using a
different delivery model – through a series of operational resilience
reviews, focusing on priority areas of the business. This model will be
extended for the Internal Audit plan covering the first half of 2021. PwC
LLP will continue to provide on-the-ground support in locations where
it would not be possible for the Internal Audit team to support in the
current pandemic.
In 2020, routine Internal Audit work delivered audits which covered
57% (by Net Revenue) of Reckitt’s global commercial business and 30%
(by industrial sales) of global manufacturing facilities. The failure rate for
2020 audits was broadly consistent with previous years; failed audits
normally receive a follow-up audit within six to 18 months as appropriate.
External Auditor
The Committee is responsible for maintaining the relationship with the
External Auditor on behalf of the Board. The company’s External Auditor
is KPMG. Following a competitive tender undertaken in 2017, KPMG was
formally appointed as the Group’s External Auditor by shareholders in
2018. There are no current plans to commence an External Audit tender.
The company will be required to conduct its next External Audit tender
no later than 2027. For the year ended 31 December 2020, the company
has complied with the Competition & Markets Authority Order: The
Statutory Services for Large Companies Market Investigation (Mandatory
use of Competitive Tender Processes and Audit Committee
Responsibilities) Order 2014.
The Committee considers and makes a recommendation to the
Board in relation to the appointment, reappointment and removal of the
External Auditor, taking into account independence, effectiveness, lead
audit partner rotation and any other relevant factors, and oversees the
Reckitt Annual Report and Accounts 2020
F I N A N C I A L S TAT E M E N T S
tendering of the External Audit contract. The Committee approves the
External Auditor’s terms of engagement and remuneration and reviews
the strategy and scope of the audit and the work plan. The Committee
also monitors the rotation of the lead audit partner every five years in
accordance with the FRC Ethical Standard. The current lead audit
partner, Richard Broadbelt, has just completed the third year of his
five-year term. A new lead audit partner will be required for the year
ending 31 December 2023.
During the year, KPMG’s reports to the Committee included the following
matters:
• audit strategy, materiality and scope (and regular updates);
• audit findings and half-year review findings (and any updates)
including identification of any significant risks to the audit and other
key accounting and reporting matters;
• mandatory communications (additional report relating to public
interest entities (PIEs), confirmation of objectivity and independence
and audit quality framework);
• report on outcome of annual impairment assessments;
• COVID-19 review of going concern and the Viability Statement;
• draft audit opinion;
• draft management representation letters;
• draft engagement letter;
• review of KPMG’s 2020 Audit Quality Inspection Report issued by the
FRC;
• analysis of non-audit services provided; and
• IT and other control findings.
Besides the annual evaluation of the External Auditor, the Committee
continually reviews the External Auditor’s effectiveness through means
such as the monitoring its progress against the agreed audit plan
and scope.
The Committee reviewed the results of the FRC’s Audit Quality
Inspection of KPMG at its meeting in July 2020. KPMG reports to the
Committee at every meeting with an audit quality scorecard, providing
a holistic view of, and their investment in, audit quality and how they
measure their audit quality progress.
The Committee reviews the nature and level of non-audit services
undertaken by the External Auditor during the year to satisfy itself that
there is no impact on its independence and is required to approve all
non-audit services. The Board recognises that in certain circumstances
the nature of the service required may make it more timely and
cost-effective to appoint an auditor that already has a good
understanding of Reckitt. The total fees paid to KPMG for the year ended
31 December 2020 were £12.7m, of which £0.8m related to non-audit
and audit-related work (to which KPMG was appointed principally for the
above reasons). The Group’s internal policy on non-audit fees (effective
1 January 2017) states that, on an annual basis, non-audit fees should not
exceed 50% of the Group’s external audit and audit-related fees for the
year. The Board confirms that, for the year ended 31 December 2020,
non-audit and audit-related fees were 6.3% of the audit fees. Details
of services provided by the External Auditor are set out in Note 4 on
page 186.
Reckitt has a formal policy in place to safeguard the External Auditor’s
independence. In addition, as part of its audit strategy presentation to
the Committee in May 2020, KPMG identified its own safeguards in place
to protect its independence and confirmed its independence in
February 2021 to the Committee.
The Group has a policy that restricts the recruitment or secondment
of individuals employed by the External Auditor into positions that
provide financial reporting oversight where they could exercise influence
over the financial or regulatory statements of the Group or the level of
audit and non-audit fees.
125
 AU D IT CO M M IT T E E R E P O RT CO N T I N U ED
The External Auditor is a key stakeholder in helping the Committee fulfil
its oversight role for the Board. In the opinion of the Committee, the
relationship with the External Auditor works well; the Committee remains
satisfied with the External Auditor’s independence and effectiveness
and believes KPMG is best placed to conduct the company’s audit for
the 2021 financial year. KPMG has expressed a willingness to continue as
External Auditor of the company. Following a recommendation by the
Committee, the Board concluded, on the Committee’s recommendation,
that it was in the best interests of shareholders to appoint KPMG as the
company’s External Auditor for the financial year ending 31 December
2021. In accordance with section 489 of the Companies Act 2006,
resolutions to propose the reappointment of KPMG as the company’s
External Auditor and to authorise the Committee to fix its remuneration
will be put to shareholders at the AGM on 28 May 2021.
During the financial year under review, the company had no
interaction with the FRC’s Corporate Reporting Review Team or its Audit
Quality Review Team.
KPMG had no connection with any Directors during the financial year,
other than it had provided use of its client hub, Number 20, to a number
of Directors until 31 January 2020, when this usage was withdrawn. Use
of Number 20, by invitation from senior management of KPMG audit/
non-audit clients, provided individuals with access to a business lounge,
bar and restaurant and meeting room bookings. All food, drink and
meeting room bookings were chargeable at normal commercial rates.
Fair, balanced and understandable
The Committee reviewed the 2020 Annual Report and Financial
Statements to ensure that they are fair, balanced and understandable
and provide sufficient information to enable shareholders to assess the
Group’s position, performance, business model and strategy.
The Annual Report project team was primarily comprised of
individuals in Reckitt’s Company Secretarial, Finance, Investor Relations,
Internal Audit, Reward, Corporate Communications and Sustainability
teams. Individuals from those teams with sufficient knowledge and
experience undertook the drafting of sections of this Annual Report. The
overall governance and coordination of the Annual Report was managed
by an Annual Report Project Manager, in conjunction with the Corporate
Communications team. The project team held regular meetings via
telephone and/or videoconference and accountability was ensured by
obtaining internal sign-off from key stakeholders in the project team for
the section(s) they were responsible for. Each section was drafted in
accordance with an agreed standard operating procedure, ensuring
that facts, figures and statements contained within the Annual Report
were verified internally and by our External Auditor as required. The
preparation and verification processes were determined to be robust.
The Directors, individually and collectively, were provided with
drafts of the Annual Report at set stages. The Disclosure Committee
met three times to ensure sufficient oversight of the preparation and
verification processes and to review drafts ahead of these being
reviewed by the Board.
The Committee reviewed the form, content and consistency of
narrative within the 2020 Annual Report and Financial Statements, the
disclosures contained in the Financial Statements and the underlying
processes and controls, which were confirmed as appropriate. The
Committee also reviewed KPMG’s audit findings report, draft audit
opinion and draft management representation letter. Following the
Committee’s review, the Committee was satisfied that the 2020 Annual
Report and Financial Statements, taken as a whole, met its objectives
and accordingly we recommended to the Board that the 2020 Annual
Report and Financial Statements be approved and we supported the
Board in making its statement on page 161.
126 Reckitt Annual Report and Accounts 2020
Governance
Terms of reference
We review our terms of reference annually. During the year, the
Committee’s terms of reference were reviewed and minor amendments
proposed, in line with best practice. Following a recommendation from
the Committee to approve its updated terms of reference, the Board
approved the changes in November 2020. The updated terms of
reference can be found at www.reckitt.com
Committee evaluation
This year, a performance evaluation of the Committee was conducted
as part of the Board’s external performance evaluation, conducted by
Lintstock Ltd. Lintstock Ltd is independent of and has no connections
to the company.
The evaluation of the Committee utilised a bespoke questionnaire,
sent to Committee members. Matters evaluated by Committee
members included time management and composition; Committee
processes and support; and the work of the Committee and its priorities
for change. All areas received overall ‘good’ or ‘excellent’ scores, with
particularly positive feedback given on the Committee’s composition;
the management of Committee meetings; Committee processes and
support; the Committee’s assessment of the work of the internal audit
function and the External Auditor; and its relationships with the Group
Head of Internal Audit, the CFO and the External Audit partner. Room for
improvement was acknowledged in the assessment of internal controls;
monitoring the management of risk; and the Committee having more
opportunities to meet with finance management. The Board, having had
sight of the results of the Committee’s evaluation, considers the
Committee to be operating effectively.
Internal Audit evaluation
The annual Internal Audit effectiveness review was conducted in two
parts. An internal audit and risk management survey was circulated
to internal stakeholders including Committee members, the Group
Executive Committee and Global Business Unit, functional and regional
leadership teams. The Internal Audit team also performed a peer review
for audits completed during the year to request feedback.
The evaluation of the Internal Audit function covered the following
areas: risk management – objectives, skills and experience, process
and key opportunities; and internal audit – skills and experience, quality,
audit scope, audit cost, audit communication, independence, change
catalyst and key opportunities. The results of the effectiveness review
demonstrated strong, positive feedback which reconfirmed the quality
and status of the function within the business. Key highlights and
opportunities identified included: the broad range of skills and expertise
of the Internal Audit team, with opportunities to continue to deepen
business understanding and awareness; clear, concise and consistent
audits with opportunities to share learnings and good practices across
the business; and recognition that the integrated risk management
framework is driving improved understanding of risk, with opportunities
such as improved integration between Risk Management and Internal
Audit and simplification of risk reporting processes.
The independence of the Group Head of Internal Audit and the
Internal Audit function was confirmed.
The Committee considered the effectiveness review and the work
carried out by the Internal Audit function as reported at every
Committee meeting and concluded that it is an effective operation and
the Committee remains satisfied that the resourcing, quality, experience
and expertise of the function is appropriate for the company.
 S T R AT E G I C R E P O R T G OV E R N A N CE F I N A N C I A L S TAT E M E N T S

External Audit evaluation

Formal evaluation of the External Auditor is normally conducted annually
at the Committee’s November meeting, reviewing the results of a
questionnaire circulated to the Board, Committee, Group Executive
Committee, Global Business Units, Finance and other functional
leadership and local finance management. The questionnaire normally
follows the competency areas outlined in the FRC’s Guidance on Audit
Quality Practice (published in December 2019): mindset and culture;
skills, character and knowledge; quality control; and judgement.
During the year it was agreed that, to provide more useful and relevant
analysis, the External Auditor’s evaluation should be aligned to completion
of their annual audit cycle, in May each year. As a result, there was no
formal External Auditor evaluation conducted during 2020, though the
Committee regularly reviews KPMG’s performance through, for example,
its reports to the Committee, its audit findings and half-year review,
feedback from management, progress against the audit plan and scope
and by KPMG’s assessment of its objectivity and independence. As in the
prior year, the Audit Committee Chair, CFO and SVP Corporate Controller
met in May 2020 with a senior partner of KPMG, independent of the audit
team and without the lead External Audit partner present, to feed back on
audit quality and service, as part of KPMG’s own quality programme.
A formal evaluation of the External Auditor’s performance for the
2020 financial year will be conducted by the Committee at its meeting in
May 2021 and the outcome reported in the company’s Annual Report
next year.
The Committee is satisfied with the effectiveness, expertise, quality,
review, and in particular, professional scepticism and challenge from the
External Auditor and believes that KPMG remains best placed to conduct
a high-quality audit of the Group for the 2021 financial year.

Reckitt Annual Report and Accounts 2020 127

 C O R P O R AT E R E S P O N S I B I L I T Y, S U S TA I N A B I L I T Y,
E T H I C S A N D CO M PLI A N CE CO M M IT T E E R E P O RT
We are committed to upholding the
company’s purpose, compass, culture
and values, acting responsibly in a
sustainable, ethical, and compliant way.
Pam Kirby
Chair of the Corporate Responsibility, Sustainability,
Ethics and Compliance Committee
128
On behalf of the Board, I am pleased to
present the Corporate Responsibility,
Sustainability, Ethics and Compliance
(CRSEC) Committee Report for the financial
year ended 31 December 2020.
The CRSEC Committee supports the Board in reviewing, monitoring
and assessing the company’s approach to responsible, sustainable,
ethical, and compliant corporate conduct and assists the Board in
upholding the company’s purpose, compass, culture and values. The
following report details the work undertaken by the Committee
during 2020 and our role in ensuring that our approach to CRSEC
is aligned to the Group’s purpose-led strategy and societal
responsibility. This year the Committee, together with the Reckitt
management team, have adapted and evolved our governance
and ways of working to meet the challenges of COVID-19. We
have continued to ensure that momentum is maintained to deliver
planned safety, quality, compliance, and sustainability objectives
within and across each of our three Global Business Units (GBUs).
I am pleased to report on our progress over the last year. In addition
to reviewing matters at our CRSEC Committee meetings, I have held
regular meetings with our CEO, Chief Safety, Quality, Regulatory and
Compliance (SQRC) Officer, Head of Corporate Affairs & Chief
Sustainability Officer, and the Chief Ethics and Compliance Officer, to
review progress against the strategy and to represent the Board in
supporting the efforts in these critical areas. Owing to the ongoing
restrictions due to COVID-19, since February, all meetings have been held
virtually, including all Committee meetings. As a result, no physical site
visits took place in the year. However, in December, the Sustainability
team held a listening session for the Committee, CEO and senior
executives to hear directly from external stakeholders and to update
them on the impact of climate change and especially water scarcity on
our business, value chains and people living in the communities where
we work. The session provided an excellent review of the issues facing
business and communities, and the perspectives of the different
stakeholders on climate change and water scarcity.
During 2020, the Committee approved an updated Code of Conduct,
which was launched in June 2020. The Code of Conduct was updated to
provide simplified guidance on Reckitt’s rules and principles, helping us
to make good decisions and navigate complex situations where the
answer might not always be clear. It sets out on how we conduct
ourselves as accountable, ethical, and compliant owners of our Health,
Hygiene and Nutrition business. It is applicable to all Reckitt employees,
our Board of Directors, contractors, outsourced personnel, and other
representatives, including joint ventures.
As a manufacturer, we are ever mindful of the emerging risks relating
to the sustainability of our products and packaging using plastics. In
addition, we are taking steps to reduce our environmental footprint,
including reduced emissions. We have monitored and supported the
varying requirements arising from such issues to ensure Reckitt is
equipped to manage its obligations and remains a responsible global
citizen, on behalf of all its stakeholders. More details on our sustainability
ambitions, activities and progress can be read from page 12 and online
at www.reckitt.com/sustainability.
We have continued to further our human rights strategy, working
with the Danish Institute for Human Rights on our total value supply chain,
embedding human rights into our overall business activity. Reckitt has
also mapped areas with migrant labour of high potential risk, for example
in Bahrain and Malaysia, and is also addressing the repayment debt
potentially accrued by those migrant workers during their international
recruitment process.
Reckitt Annual Report and Accounts 2020
 S T R AT E G I C R E P O R T G OV E R N A N CE
We were delighted in October 2020 when Reckitt secured continued
accreditation for 2021 with the FTSE4Good Index; an illustration of our
ongoing corporate commitment to good environmental, social and
governance (ESG) practices. This is the 17th year of recognition in the
index and also recognition of meeting the 20 additional mandatory
Breast Milk Substitute (BMS) marketing criteria in December 2018.
In 2020, the COVID-19 pandemic meant we had to act with urgency to
skew our focus initially to addressing the stress faced by our consumers
and communities where we operate, to help stem the spread of the virus
and break the chain of infection. Reckitt’s Fight for Access Fund was
established to work with partner organisations, help frontline health
workers, promote behavioural change and help the communities in which
we live and work. We mobilised over £52m to address our fight against
the spread of COVID-19, across 66 countries including donating Reckitt
products to the NHS, partnering with Meals on Wheels Australia to support
and protect the elderly and partnering with UNAIDS to help protect
people living with HIV across Africa. More information on the Fight for
Access Fund can be found on our website at www.reckitt.com/
sustainability or on page 49.
Finally, although not mentioned specifically in the following report, the
Committee continued to oversee and review the efforts to mitigate the
impact and alleviate the suffering caused by the tragic South Korea
Humidifier Sanitizer (HS) issue. This includes carrying out root cause
analysis on the HS issue and presenting this to the Korean Social Disasters
Commission. Further details on the event and our remediation efforts can
be found at www.reckitt.com/sustainability/sustainable-business/
humidifier-sanitizer/.
Committee priorities for 2021
• Oversee and make recommendations to the executives and the
Board for actions to be taken in respect of the Group’s corporate
responsibility and sustainability, ethics and compliance strategies,
policies, programmes, and activities.
• Take a proactive approach in anticipating and preparing for legislative
or regulatory changes and reviewing processes to ensure
compliance.
• Review our sustainability objectives and chart progress against our
targets, including overseeing the Group’s conduct with regard to its
corporate and societal obligations as a responsible global citizen on
behalf of all its stakeholders.
• Monitor and review the processes for risk assessment as regards
corporate responsibility (including human rights and product safety),
sustainability and compliance matters (including regulatory and
quality risk assurance and restrictive trade practices) and ethical
conduct, including the impact of COVID-19 and any associated risks
to the Group.
• Ensure there is no loss in momentum and focus on delivering the
safety, quality, and compliance agenda that management has
committed to. We will monitor the progress of a number of
Group-wide initiatives, as well as the establishment of proper
governance and oversight.
I would like to thank my fellow Committee members, Chris Sinclair,
Nicandro Durante and Mehmood Khan, for their diligence and service to
the Committee, and all my fellow Board colleagues for their strong
support and focus on our work throughout the year. I also thank the
Reckitt management team for the timeliness, quality, and rigour of their
reporting. In particular, I would like to express my personal thanks to
Zephanie Jordan, who is leaving the company in April 2021. During her
time at Reckitt, Zephanie has shown outstanding leadership, bringing
substantial improvements in areas of safety, quality, regulatory and
compliance. We wish her well for the future.
Pam Kirby
Chair of the Corporate Responsibility, Sustainability, Ethics and
Compliance Committee
Reckitt Benckiser Group plc
15 March 2021
Reckitt Annual Report and Accounts 2020
F I N A N C I A L S TAT E M E N T S
Activities
Some of the key achievements in the reporting period follow.
Reckitt Code of Conduct
The arrival of Laxman Narasimhan as CEO and the publication of our new
compass prompted an opportunity to refresh Reckitt’s Code of Conduct.
The updated Code of Conduct sends a clear message on the behaviours
that – as individuals, as teams, and as a company – we need to follow in
order to rejuvenate sustainable growth and continue to protect, heal and
nurture the generations to come.
The content of the Code of Conduct has been summarised, adopting
shorter and sharper messages which resonate more closely with
Reckitt’s population of millennials. Seeking to ensure that every
employee has a clear understanding of the principles and values which
we want to uphold, the Code also incorporates practical examples on
ethical decision-making and illustrates what leading with integrity
means. New sections have been added such as guidance to managers
facing difficult decisions and how managers are expected to handle
concerns raised by their team members. There are also new sections on
Fair Competition, Trade Sanctions, Bribery & Corruption, Health & Safety
and Speak Up (amongst others).
The new Code of Conduct will assist us in continuing to evolve our
company’s culture and embed our compass into our day-to-day operations.
Honest reflections on ethics training
To continuously enable cultural transformation and support the
organisation in embedding the principles set out in our compass and
Code of Conduct, we partnered with psychology-based transformation
consultants to develop our Honest Reflections on Ethics training.
Prompting employees to reflect on situations that could lead to bad
decisions, the training aims to equip employees with a better
understanding of the trade-offs involved in taking risks and “getting the
job done”, as opposed to making ethical business decisions and “Doing
the Right Thing. Always”.
To date, the Ethics and Compliance teams have deployed the Honest
Reflections on Ethics campaign to thousands of employees worldwide
and – in particular – to those operating in high-risk countries and
covering positions with significant decision-making influence, such as
General Management and Commercial functions.
Mandatory compliance training
Seeking to expand the reach and maximise the impact of our training
programme, we developed bite-sized mandatory compliance training
modules on a broad range of topics: the Code of Conduct, business
integrity, anti-bribery and corruption, compliance with competition laws,
data privacy, cyber security and product safety. The training is expected
to be completed by 100% of employees and contractors worldwide by
31 March 2021.
Additionally, we developed in-depth training courses to raise
employees’ awareness of key risks affecting our organisation and of the
processes and procedures we have in place to mitigate these risks.
129
 C O R P O R AT E R E S P O N S I B I L I T Y, S U S TA I N A B I L I T Y,
E T H I C S A N D CO M PLI A N CE CO M M IT T E E R E P O RT CO N T I N U ED
Enhancements of ethics and compliance resources and
infrastructure
2020 also saw us enhancing our compliance infrastructure and investing
in the deployment of improved technical capabilities, such as:
• a new Speak Up case management platform to orchestrate the
investigation of whistleblowing reports end to end (from escalation
and triaging, through to resolution);
• a new platform to report potential conflicts of interest which allows
us to manage disclosures from receipt through to resolution; overall,
we have received 1,878 conflict of interest reports throughout 2020
– 687 cases have been resolved, while all others are in the process of
being investigated;
• a new system for registering gifts and entertainment which allows us
to track which gifts or hospitality offers have been received and from
whom; it also allows us to guide the recipient through the next steps
they need to take in order to reduce potential risks of bribery and
corruption; in 2020, 286 gifts or hospitality offers have been reported;
• a new system to assess the Fair Market Value of Reckitt’s interactions
with healthcare professionals (HCP), which helps us log our business
needs for engaging HCP and provides quotations to ensure that
any HCP compensation is justified and in accordance with local
market rates.
Data Privacy Compliance Programme
Throughout 2020, we continued to monitor and react to changes in the
regulatory framework. We recognise that, after the promulgation of the
European General Data Protection Regulation, the privacy regulatory
landscape has become increasingly more stringent. New laws such as
the California Consumer Protection Act and Brazil’s new General Data
Protection Law came into force in 2020, significantly affecting our data
handling practices.
Seeking to bring our operations into compliance with the spirit of this
more stringent regulatory framework, we completed large programmes
of work, hired additional permanent data protection resources, and
developed a network of over 150 Privacy Champions worldwide. We
also conducted in excess of 2,500 Privacy Impact Assessments,
responded timely to 448 Data Subjects’ Requests and delivered
extensive face-to-face training to the employee base.
We also initiated new privacy programmes in markets where privacy
legislations are currently changing such as China, India, and South Africa.
Work in these markets is still ongoing and is due to complete by the end
of 2021.
Speak Up service
2020 was an opportunity to continue raising awareness of the
confidential Speak Up service, available for all employees and third
parties to ask questions and raise concerns on potential violations of
regulations, internal policies or any misconduct observed at Reckitt.
A Speak Up campaign was launched globally and led to a significant
increase in reported cases. To ensure the increase in cases were
managed and investigated in a timely manner, in-depth Speak Up
Investigation training was delivered to individuals responsible for leading
investigations, from Ethics and Compliance or other relevant functions.
We received a total of 439 Speak Up cases during 2020. Most cases
were investigated and closed, and some are still under investigation. A
total of 101 reports have been considered to be substantiated or partially
substantiated during 2020. The complete report can be viewed online at
www.reckitt.com/sustainability/sustainable-business/business-ethics/.
130 Reckitt Annual Report and Accounts 2020
Environment
From the perspective of environmental impact, the increasing
recognition of the connection between human health and planetary
health during the pandemic reaffirmed the need for Reckitt’s approach
to combat climate change. Our commitment in the summer of 2020
to accelerate our delivery of the Paris Climate Agreement by 2030
for our operations embraced a science-based targets approach and
provided the foundation for our ambition to achieve carbon neutrality
for both operations and products by 2040. We are pleased to be
working alongside a key customer, Amazon, to deliver that shared
ambition, and know that collaboration will be essential to deliver on
the planetary imperative. We have made good progress since then,
reducing greenhouse gas and increasing our use of renewable electricity
with the US, Europe and India amongst other markets now buying
100% renewable electricity alongside increasing on-site renewable
generation through solar power. This is alongside our continued drive
for energy efficiency. While we have made reasonable progress since
2012, we are slightly under our 2020 target and will strengthen our
approach in 2021 as part of our greenhouse gas reduction activity.
Water efficiency has continued to improve, again surpassing our 2020
target by achieving a 39% overall improvement. To further understand
the issues of water stress that exist in some Reckitt markets, the
Committee hosted a stakeholder engagement session with members
of the UK and Indian state governments, civil society, customers, and
the investor community. This supports ongoing oversight of Reckitt
activity which has increased development of water catchment area
management in water-stressed locations such as in Hosur, India.
Environmental performance improvement has also been extended
into suppliers through a cloud-based approach that supports key
suppliers and co-packers. Moving beyond regulatory compliance, this
will progressively reduce Reckitt’s overall environmental footprint.
There has been improvement in product sustainability, with 30% of
Net Revenue from more sustainable products in 2020. While not quite
achieving our 33% goal, this is a strong increase on 2019 during a year
when our agenda was dominated by maintaining supply of established
products to combat the pandemic. There is significantly more work to
do to reduce our product carbon and water footprints in the coming
decade. The 2020 target was missed due to a focus on manufacturing
footprint until the past two years. We have now increased our focus on
product footprints with further evolution of our Sustainable Innovation
Calculator (SIC) which is now present in all new product development
cycles to enable an ambition that, in some way, all new products are
more sustainable than their predecessors. This will support our climate
change agenda where we have recently partnered with the Judge
Business School at Cambridge University to further assess, understand,
and mitigate the impacts of climate change within our global value
chains. This partnership will further strengthen our response and support
for climate change risk reporting mechanisms.
Responsible marketing practices – Infant and Child Nutrition (IFCN)
In the three and a half years since entering the field of infant and child
nutrition, Reckitt has taken significant steps in strengthening policies,
processes, procedures, demonstrating accountability and transparency,
both internally and externally. Our progress has been captured in the
2017 to 2020 Progress Report, found at www.reckitt.com/media/7126/-
reckitt-and-bms-progress-2017-2020.pdf.
As part of our governance mandate and also our commitment to
monitoring the proper implementation of, and compliance with our BMS
Marketing Policy, we undertake independent external verifications on our
IFCN marketing practices. The Brazilian and Indonesian 2020 audit
reports and Reckitt’s response and corrective action plan are publicly
available at www.reckitt.com/sustainability/sustainable-business/
infant-and-child-nutrition/policies-and-progress-reports/.
 S T R AT E G I C R E P O R T G OV E R N A N CE
We are also committed to collating and reporting on all alleged
non-compliances as well as implementing corrective actions where
required. The report for fiscal year 2019 is available at www.reckitt.com/
media/6046/bms-progress-report-2019.pdf and we will be publishing a
similar report for 2020 later this year.
As a result of Reckitt’s continued accreditation in the FTSE4Good
Index, FTSE undertakes independent verifications of Reckitt’s BMS
marketing practices. In late 2019, the first step was completed – a review
of our corporate centre, and in March and December 2020, independent
verifications were conducted in the Philippines and Mexico. In addition,
the Access to Nutrition Initiative (ATNI) also independently reviewed
Reckitt’s BMS Marketing Policy, systems and the external marketplace in
the Philippines and Mexico. The public reporting of the findings and
results of both the FTSE verifications and ATNI review are expected by
June 2021.
In June 2020, Reckitt was one of the 21 global BMS manufacturers
that were invited to respond to a multi-stakeholder Call to Action, aimed
at increasing marketing restrictions for products from birth up to 36
months. We do not support implementing further restrictions but remain
committed to the dialogue and in advancing industry-wide progress on
improving transparency and accountability.
The CRSEC Committee has final oversight of all IFCN-related
reporting, and all policies and reports can be found at www.reckitt.com/
sustainability/sustainable-business/infant-and-child-nutrition/.
Nutrition and responsibility, the first step
Our first nutrition commitment focused on sugar, which is a carbohydrate
essential to providing energy to the body. While there are many types of
sugar, lactose is our preferred carbohydrate source as it naturally occurs
in human breast milk. In September 2020, we outlined our specific
commitments on sugar for our infant and child nutrition portfolio, to be
implemented by March 2024, found at www.reckitt.com/media/7195/
ifcn-sugar-commitment_1-october-2020.pdf. We look forward to
building on our leadership in nutritional science and extending our
support of the nutritional needs of consumers through every stage
in life and across all geographies.
Ingredients
Reckitt has continued to strengthen governance and delivery of product
safety positions, with additional resources for the safety function. The
product stewardship team continued their focus on restricted
substances, enforcing our Restricted Substances List agenda and
strengthening coordination of regulatory, safety, R&D, and sustainability
functions through our Ingredients Steering Groups. This also builds
resilience and is progressively targeting further reductions in our
chemical footprint alongside greater transparency for consumers.
We are building more sustainable products for the future, both
through the increase in Net Revenue from more sustainable products
and SIC. The development of R&D science platforms is identifying new
science and applications for the future will support product innovation.
These include both increased efficacy for consumers and new materials,
such as work on polymers, that will enhance products and packaging
while aligning with sustainability principles of green chemistry.
The continued delivery of our pledge on plastics in packaging has
increased the amount of recycled material that we use and the
recyclability of packaging in general and has reduced overall plastic use.
The latter is an important platform for the future, while also supporting
cost management. Our approach involves partnerships with packaging
material producers to enable future innovation and supply.
Reckitt Annual Report and Accounts 2020
F I N A N C I A L S TAT E M E N T S
Human rights and societal impact
Reckitt’s human rights programmes have continued to embed labour
standards and human rights within our supplier network. Supplier
monitoring continued despite the challenges of travel during the
pandemic, and we continued to see improvements in supplier
performance as described in our Modern Slavery Act report published
in May. The Statement can be found at: www.reckitt.com/newsroom/
latest-news/news/2020/may/reckitt-releases-2019-modern-slavery-act-
statement/. Our partnership with the Danish Institute for Human Rights
continued and involved a human rights impact assessment of our value
chain in Thailand. The assessment can be found at www.reckitt.com/
sustainability/people-and-communities/human-rights/. The resulting
action plan strengthens support for human rights throughout that value
chain, from the small farmers providing us with latex to the communities
around our sites, and the consumers we serve. The new partnership with
Fair Rubber will not only strengthen those farmers’ livelihoods but will
strengthen supply of this important natural raw material.
Given the potential risks of modern slavery, we were pleased to
extend work on migrant labour in a number of markets, especially the
Middle East. This involved repayment of recruitment fees for workers
in key sites, alongside our ongoing supplier programme to protect
migrant workers.
Reckitt Global Hygiene Institute (RGHI)
Inaugurated in July 2020 with funding of $25m over five years, the
RGHI is a global, independent, scientific research and innovation
hub that bridges epidemiology, public health policy, and behaviour
insights. Created in response to the surge in interest in good hygiene
during the COVID-19 pandemic, the RGHI exists to champion
hygiene as the foundation of health and promote behaviour change.
In October 2020, the RGHI appointed and convened its global
leading panel of experts and published its first article, the RGHI’s
first ever opinion piece on the need to maintain hygiene standards,
which was published in November 2020 in the Daily Telegraph.
The Committee continues to monitor the activity of the RGHI,
and looking ahead into 2021, the RGHI will continue to discuss and
formalise the next steps for fellowship and grant programmes.
Corporate security
In 2020, we implemented a new Corporate Security Policy setting out
the minimum-security measures to be adopted across all Reckitt sites
to protect our people, assets, products, and reputation.
On the topic of “keeping our people safe”, in January 2020 our
Corporate Security team rolled out a new Emergency Notification
System aimed at providing accurate, punctual information on workforce
safety – the system proved to be critical throughout the numerous
instances of civil unrests and anti-government protests taking place
in 2020.
From January 2020 onwards, our Corporate Security team also played
a crucial role in keeping our workforce safe throughout the COVID-19
pandemic. On a daily basis, the team monitored the number of reported
COVID-19 cases per country, national restrictions and – as of recently –
vaccination rates. Their updates proved vital to keep our leadership
teams up to date on the latest COVID-19 developments and to enable
business readiness and resilience.
Safety, Quality and Regulatory Compliance (SQRC) programmes
The Committee has continued its oversight of the SQRC remediation
and infrastructure programmes. Following the successful deployment
of the product lifecycle management programme in our Bangpakong
manufacturing facility, the system was further developed as a global
template and deployment has commenced, first to our Derby facility,
and it is on track to be deployed across the business units with a
planned completion date of 2023.
The Product Integrity Review programme continued to be impacted
by COVID-19 travel restrictions, which caused some delays. However, the
programme is still on track for completion in mid-2021.
131
 C O R P O R AT E R E S P O N S I B I L I T Y, S U S TA I N A B I L I T Y,
E T H I C S A N D CO M PLI A N CE CO M M IT T E E R E P O RT CO N T I N U ED

Composition
At the outset of the pandemic, our quality operations were refocused on The members of the Committee during the year were:
sustaining quality performance, product release and qualifying additional
sites for manufacture of critical products.
We have continued to monitor quality and employee health and Composition Tenure during the year
safety leading and lagging indicators which have driven real-time
improvement actions and which are demonstrating improved Pam Kirby (Chair) Chair and member of the Committee for the
whole year
performance in audits, product-related issues and safety incidence. This
was despite the impact on audits as a result of COVID-19 travel Nicandro Durante Member for the whole year
restrictions and most employees working from home. Virtual Mehmood Khan Member for the whole year
governance reviews were introduced with each supply site to review
Chris Sinclair Member for the whole year
specific employee health and safety topics, including COVID-19
responsiveness.
The Head of Group Secretariat was Secretary to the Committee for the
In October, an updated Reckitt Global Product Safety Policy was
full year.
published. It applies to all employees of Reckitt companies and Reckitt
Members of the Committee are appointed by the Board on the
contractors globally when acting on behalf of Reckitt while undertaking
recommendation of the Nomination Committee, which reviews
tasks that impact the safety of Reckitt products at any time throughout
membership in terms of skills, knowledge, diversity, and experience. The
the product lifecycle. It can be found at www.reckitt.com/media/694/
Board is satisfied that each member of the Committee is independent
sustainability-product-safety-policy.pdf.
and that Committee members as a whole have competence relevant to
To enable readiness for Brexit, a Group-wide effort has been under
the company’s sector and industries in which it operates. On joining the
way since 2018 to adapt product licences, adjust artwork and transfer
Committee and during their tenure, members receive additional training
quality release laboratories to EU sites in time for the transition on
tailored to their individual requirements. Such training includes meetings
31 December 2020.
with internal management covering CRSEC matters. All members of the
The Committee continued to monitor regulatory issues in many
Committee receive regular briefings from senior executives on matters
jurisdictions and the business readiness to adapt. The regulation of infant
covering governance, regulatory and legislative developments, product
nutrition products in China continues to evolve, requiring ongoing effort
safety and corporate responsibility, sustainability and ethics-related
to adapt and comply.
matters, and Reckitt practices and policies in these areas.
Performance review
Responsibilities
Following the key outcomes of the 2019 performance review, the
The Committee is part of the Group’s governance framework and
Committee reviewed its manner of Committee meeting preparation
supports the Board in fulfilling its oversight responsibilities in ensuring
so that more concise, focused pre-reads were submitted to the
the integrity of the Group’s corporate responsibility and sustainability,
Committee before meetings, and meetings themselves focused
ethics and compliance strategies, policies, programmes and activities. Its
on interactive discussion.
role and responsibilities are set out in its terms of reference, which can
This year, a performance evaluation of the Committee was
be found at www.reckitt.com. In November 2020, the Board approved
conducted as part of the Board’s external performance evaluation,
the Committee’s proposed changes to its terms of reference, to take
conducted by Lintstock Ltd. Lintstock Ltd is independent of and has no
account of recommended best practice. We review our terms of
connections to the company.
reference annually.
The evaluation of the Committee utilised a bespoke questionnaire,
The Audit Committee has a monitoring function in respect of risk
sent to Committee members. The 2020 performance review focused
management and internal control systems, especially financial controls, but
on the Committee’s time management and composition, processes
which also includes the assurance framework established by management
and support and work carried out. Positive feedback was received
to identify and monitor risks identified by the CRSEC Committee. The
in all areas. It was noted that progress has been made in terms of
Committee liaises with the Audit Committee as appropriate.
the information provided to the Committee, being more succinct
with cover memos and attachments. Meetings were managed
well, with a focus on key issues, leaving more time for queries and
discussion. The composition of the Committee was also rated
highly, with members having a good balance of knowledge and
appropriate capabilities. It was noted that the Committee played
an important role in monitoring Reckitt’s conduct with regard to
its corporate and societal obligations and compliance with laws,
regulations, codes of conduct and internal policies and procedures.
The Board, having had sight of the results of the Committee’s
evaluation, considers the Committee to be operating effectively.
To continually improve performance in 2021, the Committee and
management undertook to focus on the following areas:
• continued refinement of discussion materials and presentations,
ensuring there is continual improvement in the brevity and
prioritisation of pre-read materials; and
• focus on delivering improvements and processes currently in
development, in order to guarantee that changes needed are
embedded into the organisation.

132 Reckitt Annual Report and Accounts 2020

 S T R AT E G I C R E P O R T G OV E R N A N CE F I N A N C I A L S TAT E M E N T S

The Committee is expected to meet at least three times per year. In
2020 the Committee held four meetings, three of which were held
virtually due to COVID-19. Meetings usually take place ahead of Board
meetings and the Chair of the Committee reports formally to the Board
on its proceedings. Attendance at Committee meetings is set out in the
Board attendance schedule on page 106 of the Corporate Governance
Report. The CEO, CFO, Chief SQRC Officer, Group Head of Audit, change
to General Counsel & Company Secretary, Chief R&D Officer, Chief
Supply Officer, Head of Group Compliance, Head of Corporate Affairs &
Chief Sustainability Officer, Head of External Communications and
Affairs, and Global Director of Sustainability, Environment and Human
Rights regularly attend meetings. Other Board members are invited to
attend all meetings. Other senior management attend when deemed
appropriate by the Committee. Time is allocated at each meeting for
private discussion with the Chief SQRC Officer, Head of Group
Compliance, Head of Corporate Affairs & Chief Sustainability Officer and
Group Head of Audit without other invitees being present, as well as a
private meeting of the Committee members. Copies of Committee
papers are provided to all Board Directors in advance of each meeting
and minutes of each Committee meeting are provided to the Board.
Agenda items
The Committee has a number of standing agenda items which it
considers in line with its terms of reference:
• Reviewing the constitution, terms of reference and performance
of the Committee.
• Assessment, benchmarking and recommendations on policies,
processes and procedures for corporate responsibility, sustainability
and compliance and ethical conduct.
• Overseeing the Group’s conduct with regard to its corporate and
societal obligations as a responsible global citizen on behalf of all
its stakeholders, including reviewing the company’s statement on
Modern Slavery and Trafficking.
• Reviewing and monitoring implementation and compliance with the
company’s Speak Up policy and review of reports.
• In conjunction with the Audit Committee, reviewing the company’s
whistleblowing, fraud and compliance arrangements, including the
adequacy and security for the workforce to raise concerns,
procedures for detecting fraud, systems and controls for the
prevention of bribery and modern slavery and the effectiveness
of anti-money laundering systems and controls.
• Monitoring and reviewing processes for risk assessment for corporate
responsibility, sustainability, and compliance and ethical conduct.
• Agreeing targets and KPIs for corporate responsibility, sustainability
and compliance and ethical conduct. Reviewing internal and external
reports on progress towards set targets and KPIs.
• Reports from management committees in respect of corporate
responsibility, sustainability, ethics, and compliance and investigating
and taking action in relation to issues raised or reported to it.

Specific matters which were considered by the Committee at its meetings during the year are shown below:

Meeting Topic

February 2020 • Product safety evaluation, product integrity review
and product lifecycle management
• Quality performance
• Quality review of Nijmegen facility in The
Netherlands
• Regulatory matters review
• 2020 compliance and ethics priorities
• Reckitt’s new Code of Conduct
• Anti-trust risk assessments
• Compliance training
• GDPR compliance
• Danish Institute for Human Rights update

May 2020 • COVID-19 impact and related matters • GDPR compliance

• Product safety evaluation, product integrity review • Health compliance maturity assessment
and product lifecycle management plan • Fight for Access Fund
• Regulatory matters review • IFCN progress, including position on sugars

July 2020 • Review product safety and quality
• Remediation programmes
• Review of Nijmegen facility in The Netherlands
• Brexit impact
• Regulatory matters review
• Monitoring compliance passport training
• GDPR and global data privacy compliance
• Governance review of risk and compliance
• Reckitt Global Hygiene Institute
• IFCN update – breast milk substitute call to action
• Environmental audits and management systems
• Investment programmes

November 2020 • Review of the Committee’s terms of reference and • GDPR update
recommendation to the Board for approval • Breast Milk Substitute pledge
• Review of the Committee’s performance • Fight for Access Fund
evaluation carried out in 2020 • Korea: root cause analysis
• 2021 Audit schedule endorsement

Reckitt Annual Report and Accounts 2020 133

 D I R E C T O R S ’ R E M U N E R AT I O N R E P O R T
Central to our remuneration
philosophy are the principles of pay
for performance and shareholder
and strategic alignment.
Mary Harris
Chair of the Remuneration Committee
This Directors’ Remuneration Report has been prepared in accordance with the provisions
of the Companies Act 2006 and Schedule 8 of the Large and Medium-sized Companies
and Groups (Accounts and Reports) Regulations 2008 (as amended). The Report meets
the requirements of the FCA Listing Authority’s Listing Rules and the Disclosure Guidance
and Transparency Rules. In this report we describe how the principles of good
governance relating to Directors’ remuneration, as set out in the UK Corporate Governance
Code (July 2018) (the Code), are applied in practice. The Remuneration Committee
confirms that throughout the financial year the company has complied with these
governance rules and best practice provisions.
134 Reckitt Annual Report and Accounts 2020
Contents of Directors’ Remuneration Report
134 Letter from the Chair
139 Remuneration at a glance
141 Remuneration Committee governance
142 Reckitt’s Remuneration Policy
143 Annual Report on Remuneration
143 2020 performance and remuneration outcomes
153 Implementation of Directors’ Remuneration Policy for 2021
153 Other required disclosures
On behalf of the Board, I am pleased to
present the Directors’ Remuneration
Report for the financial year ended
31 December 2020.
I have met and corresponded with the majority of our major
shareholders in the last two years as we made significant changes
to the Remuneration Policy at Reckitt which was approved with a
vote of 87% at the 2019 AGM and is summarised in the table on page
139. The Committee is of the view that the current remuneration
framework remains fit for purpose and therefore we are not
proposing to make any major changes to the operation of the Policy
for 2021. In line with the three-year lifecycle, a new Policy will be
put forward to a binding shareholder vote at the 2022 AGM. The
Committee, alongside management, will be working on the design
of this new Policy during the course of 2021 and we will consult with
shareholders to gather feedback on the proposals later on this year.
Context for executive remuneration at Reckitt
Reckitt strives for leading global performance. Our management team is
multinational, and we compete for talent against a peer group of global
companies. Central to our remuneration philosophy are the principles of
pay for performance and shareholder, as well as strategic, alignment.
Combined with Reckitt’s compass and business model, they define
how decisions are made, how people act and how we assess and
reward them.
It has been one year since our CEO, Laxman Narasimhan, announced
the findings of his strategic review. Reckitt now operates through three
Global Business Units of Hygiene, Health and Nutrition, as we fulfil our
purpose to protect, heal and nurture in the relentless pursuit of a cleaner,
healthier world. We are inspired by the fight to make access to the
highest quality hygiene, wellness and nourishment a right, not a privilege.
Our fight and purpose are driven by our compass, and we know if we
stick to these principles, we will achieve our long-term ambition to
rejuvenate sustainable growth. This purpose has had even more meaning
during the global pandemic.
The strategy of the company is intended to rejuvenate sustainable
growth and deliver shareholder value. The Group’s key strategic priorities
in the mid-term are restoring organic mid single digits growth to the top
line, focusing on achieving sustainable earnings growth and maintaining
disciplined capital allocation.
 S T R AT E G I C R E P O R T G OV E R N A N CE
COVID-19
2020 has been an unprecedented year for Reckitt and the world around
us. The global health crisis has created a challenging environment for our
people, customers and consumers, as well as trusted suppliers, partners
and other stakeholders. We continue to focus our efforts on meeting the
needs of our customers and consumers, whilst ensuring our people and
partners have a safe working and living environment for themselves and
their families. I am incredibly proud of the efforts of our people, who
have worked tirelessly to deliver essential products to help combat
the pandemic, whilst staying safe, with focus and dedication in an
environment that has been changing daily.
The company did not ‘furlough’ any employees, or use any
government programmes for its own benefit. Indeed the company
went further than this with a range of support provided by Reckitt for
employees impacted by the pandemic, including ensuring safety of our
frontline employees particularly in manufacturing and supply; providing
recognition and financial support to frontline employees including the
provision of monetary bonuses; ensuring that all employees have access
to an Employee Assistance Programme; and providing financial support
for employees working from home to purchase essential equipment to
enable a productive and safe home working environment. These
necessary actions resulted in COVID-19 related costs for the year of
around £120 million (c.80bps). We enhanced our focus on employee
wellbeing by sharing guidance on remote working including podcasts
featuring tips from Reckitt leaders on how to take care of themselves,
their loved ones and colleagues. We paused global operations on two
occasions so colleagues could rest and recover and have also provided
employees with free essential Reckitt products including antiseptic and
disinfectants. The company also maintained its commitments to aid
programmes, making significant donations to a number of causes,
particularly through the Reckitt Fight for Access Fund, supporting our
consumers and the communities in which we operate, as outlined in
other parts of this Annual Report and Accounts.
Our trusted disinfectant brands including Dettol and Lysol have
experienced strong demand, as have self-care and preventative
products including Airborne supplements and brands like Finish as
people have been nesting at home. The team have stepped up in an
extraordinary way, not only to ensure the supply for unprecedented
demand, but also to pursue our strategic goals of growing the business
into new places and spaces, as well as investing in growth enablers like
supply chain management, customer service and R&D. The
unprecedented situation has created new growth opportunities for
Reckitt as detailed elsewhere in this report; strong demand for Dettol
and Lysol, amongst others, looks set to remain at higher than pre-
COVID-19 levels, driven by greater health awareness. In addition, other
Reckitt brands have seen strong growth during the year and the
development of e-commerce has step-changed under the new
management team, with record levels of activity through new and
existing channels.
Reckitt Annual Report and Accounts 2020
F I N A N C I A L S TAT E M E N T S
Annual bonus in respect of 2020 performance
Reckitt operates an annual bonus plan that is strongly aligned to
performance, measured against targets set by the Committee at the
start of the year for Net Revenue growth and adjusted profit before
income tax. The performance targets were based on the business plan
at the time and took into account our strategic transformation goals for
the year, as announced by Laxman in February 2020. The Committee
considers that these targets were set at stretching levels in this context
and were ahead of consensus expectations at the time.
  As it does every year, the Committee evaluated the performance of
both the company and the Executive Directors in the round and with
regard to broader circumstances to assess whether the level of annual
bonus payout is appropriate and justified, as described below.
From a financial point of view, 2020 was an excellent year for Reckitt
under its new leadership, with very strong Like-for-Like Net Revenue
growth of +11.8% primarily driven by strong volume growth and an
increase in price/mix. There has been strong growth in e-commerce of
56% and it now makes up approximately 12% of total Group revenue. The
adjusted operating margin was 23.6% and adjusted profit before income
tax was £3.1 billion at a constant exchange basis, significantly
outperforming both internal and external expectations. We achieved
record free cash flow generation of £3 billion representing a 42.3%
growth on last year.
As set out in more detail on pages 144-145 these results reflect
performance above the maximum level of the performance ranges set
for the 2020 annual bonus. As a result, the formulaic outcome of the 2020
annual bonus for the Executive Directors is 100% of maximum, which is in
line with all other employees on the same Group-wide measures.
As it does every year, the Committee also evaluated the
performance of both the company and the Executive Directors in the
round to assess whether the level of annual bonus payout is appropriate.
In addition to the financial operating performance summarised above,
this year’s assessment included, amongst others, the following areas:
• Strategic delivery: In respect of strategic commitments, progress in
the year has been very strong, with a new management team and
organisational structure introduced. A record £745 million in major
investments in the enablers of growth is well under way and an
enhanced productivity programme delivering ahead of target for the
year. 2020 also saw the establishment of Global Business Solutions,
our professional channel, which has been set up to amplify the
footprint of Dettol and Lysol and is already growing fast.
• Competitive performance: The Committee reviewed financial and
market share performance against competitors. In both cases Reckitt
has performed strongly. There has been substantial market share
growth by our market-leading products during 2020 with around 70%
of our top category market units by revenue either gaining or holding
market share; Reckitt’s Like-for-Like revenue growth of +11.8% at a
constant exchange rate basis is at the top of our peers and materially
above the peer group average of +4%.
• Delivery of shareholder value: Over 2020, Reckitt created
nearly £4.5 billion of shareholder value, including £1.2 billion in
dividends, delivering a shareholder return of 10% in the 12 months
to 31 December 2020, outperforming our peer group (5% return) and
the FTSE 100 index (-10% return). During this year the company has
reduced net debt by over £1.7 billion through improved cash
generation and maintaining a strong fiscal discipline funding of our
investment programme through enhanced productivity and
outperformance. The company’s full year dividend remains
unchanged at 174.6p.
• Purpose, people, culture and sustainability: During the year there
was the successful introduction of the new corporate purpose, fight
and compass as well as new leadership behaviours to support the
cultural evolution of the business. We have launched a number of
initiatives to embed diversity and inclusion in our culture and have
enhanced the focus on employee safety and wellbeing. The
Committee noted the new environmental ambitions, with the
135
 D I R E C T O R S ’ R E M U N E R AT I O N R E P O R T C O N T I N U E D
company’s pledge to accelerate delivery of the Paris Climate Change
Agreement to keep global warming to below 1.5oC as well as the
good progress against the 2020 ESG goals as set out on pages 26-27.
A new ESG strategy has also been developed, with new sustainability
ambitions which will be launched later in 2021.
• Response to COVID-19: In assessing the broader circumstances,
the Committee also considered the impact of the COVID-19 global
pandemic on our people, customers and consumers and other
stakeholders and on the company’s trading conditions, the
operational disruption that it faced and how the company responded.
The Committee believes that both the company and the Executive
Directors responded in line with our purpose and compass, putting
employee safety and our responsibility to our consumers, customers
and communities first, whilst acting decisively and effectively during
the pandemic, with detail set out above. As set out on page 41,
employee feedback on the company’s response was very favourable
and showed a highly motivated workforce, strongly committed to
our purpose and fight. This enabled Reckitt to trade and perform
successfully during 2020, including the delivery of significant
increases in production that aided supply of critical antiseptic
and disinfectant products.
• Challenges: The Committee also reviewed operational challenges
faced during the year and how the leadership responded to them.
This included the adverse impact of ongoing restrictions on
cross-border trade activity between Hong Kong and mainland
China, impacting IFCN. In mainland China itself, we continue to
compete well against our multinational peers and grow share in the
high-premium and super-high-premium markets. The Committee
reviewed the goodwill impairment in respect of IFCN, which
reflected the volatility and uncertainties relating to COVID-19 and
also considered performance in Latin America after the overhaul
of a key spray-dryer facility in Mexico. The Committee considered
the decisive actions taken on Reckitt’s portfolio, including the launch
of a strategic review of IFCN in China.  
Taking all of the above into account, the combination of the robust
leadership on purpose, people, culture and sustainability coupled
with the very strong strategic progress, financial and operational
performance, outperformance of peers, strong shareholder returns
during the year and response to the COVID-19 pandemic has led the
Remuneration Committee to conclude that the formulaic outcome is
justified and no discretion has been applied for the 2020 bonus awards.
In line with the Remuneration Policy for Executive Directors,
one-third of the annual bonus will be deferred into an award over
Reckitt shares for three years, with the balance paid in cash.
Vesting of the 2018-2020 LTIP
None of our current Executive Directors were with the Group at the
time these awards were granted and this award lapsed in full for
other employees.
As disclosed in detail in last year’s Annual Report, Laxman received
a buyout in respect of long-term incentive awards he forfeited on
leaving PepsiCo. To replace his forfeited awards on a Like-for-Like
basis in terms of form of award, time horizons and actual payout
levels, he was awarded Reckitt shares and a long-term cash award
which will vest in 2021 based on PepsiCo performance to 2020. As
the PepsiCo performance is not known at the date of this report,
we have estimated the vesting of this award assuming the same
level of vesting as his previous buyout award which vested last year
and we will restate the actual vesting level in next year’s report.
136 Reckitt Annual Report and Accounts 2020
2020 single figure
The result of the decisions summarised above is a total single figure of
£5.4 million for Laxman (excluding the buyout of legacy arrangements
from his previous employer) and £2.3 million for Jeff Carr, CFO. The chart
below illustrates the breakdown of the single figure.
Singe figure illustration (£m)
CEO
CFO
0 1 2 3 4 5 6
Fixed Annual bonus (cash) Annual bonus (shares)
Board changes
Jeff joined the company and the Board as Chief Financial Officer on
9 April 2020, succeeding Adrian Hennah who has retired. Adrian stepped
down as CFO and from the Board when Jeff joined the Group, remaining
with the company until his retirement date of 21 October 2020 to ensure
a seamless transition. Details of Jeff’s joining arrangements and Adrian’s
leaving arrangements were disclosed in the 2019 Directors’
Remuneration Report.
2021 remuneration
The Committee reviewed base salary levels for both the CEO and CFO
and determined that it was appropriate to award a 3% increase in line
with the average salary increase for our UK employee base and taking
into account company and individual performance. Salaries for 2021 are
£979,000 and £700,000 for the CEO and CFO respectively.
   There are no changes to the bonus opportunity for the CEO and
CFO, remaining at 120% and 100% of salary at target respectively.
Performance measures and weightings for the 2021 annual bonus will be
the same as for 2020. In line with prior years, the Committee has set the
performance targets at a stretching level taking into account the internal
business plan and external expectations on performance. As in prior
years, the Committee will carry out a thorough assessment of
performance in the round taking into account a wide range of factors
before determining bonus payouts.
   There are also no changes proposed to LTIP award levels for 2021,
which have been reviewed in light of share price performance, company
performance and individual performance. Laxman’s 2021 LTIP award will
consist of 150,000 performance share options and 75,000 performance
shares and Jeff’s award will be 80,000 performance share options and
40,000 performance shares. These awards are expected to be made in
May 2021.
   As it does every year, the Committee reviewed the performance
measures used in the LTIP and concluded that the combination of the
existing range of measures (and weightings) are most appropriate for
the company, in light of the strategic priorities announced by Laxman
in 2020.
   Sustainability is a key priority for the company and the Committee is
aware of the current focus on ESG more broadly, including that a number
of firms are incorporating ESG measures into incentive schemes. Whilst
the Committee understands the importance of ESG, at Reckitt the wider
strategy on ESG is currently being developed and investors will be
updated on this during 2021. As such, whilst the Committee determined
that it was not appropriate to include ESG measures in incentives in the
current Policy, we will keep this position under review and may look to
incorporate ESG measures into incentive schemes when it is appropriate
to do so; the intention is to review this as the Policy is developed for
approval by shareholders at our 2022 AGM.
 S T R AT E G I C R E P O R T G OV E R N A N CE F I N A N C I A L S TAT E M E N T S

Due to the continued uncertainty in the external environment related to As mentioned previously, I am pleased to say that none of our employees
the COVID-19 pandemic and the portfolio changes outlined in our 2020 were furloughed during this unprecedented year and the company
results announcement, the Committee currently intends to set the LTIP offered a range of support for employees impacted by the pandemic,
targets and announce them at the time the awards are made in May details of which I have summarised earlier in this letter. We are also
2021. They will also be set out in full in the 2021 Remuneration Report. In conscious that our people have worked extremely hard and their safety
addition as the goodwill impairment in respect of IFCN reduces the and wellbeing is a priority. In 2020, we paused global operations on
capital employed it has the potential to increase the calculation of ROCE two occasions so colleagues could rest and recover and have recently
for LTIP purposes. The Committee will ensure that the impairment does launched a comprehensive employee wellbeing programme with
not lead to an increase in vesting in respect of the proportion of the LTIP external partners, involving significant investment over three years.
related to ROCE in future years. As discussed in the Strategic Report we are reviewing all of our policies
During the year the Chairman and NED fees have been reviewed to ensure that they are inclusive by design and have also launched
taking into account the increasing time commitment required to meet several initiatives such as the Stronger Together conversation series,
the scope and responsibilities of the roles, the increases given to the a five year commitment focusing on diversity and inclusion (D&I)
wider workforce and market practice. The fee for the Chairman has and belonging topics that matter most to our people, as well as the
been increased by 3.6% to £570,000 which was broadly in line with establishment of a D&I board comprised of senior leaders and chaired
increases to the broader UK workforce, effective from 1 January 2021. by the CEO, to lead the D&I strategic agenda across Reckitt.
25% of the fee continues to be paid in shares. This fee level remains Finally, since 26 July 2019, I have been the designated NED for
below the lower quartile for the Chair of FTSE 30 companies. It is the engagement with the company’s workforce. In this role I have had the
Committee’s intention to further review the Chairman’s fee during 2021 same access to internal communications materials, channels and events
with any potential increase to align the fee with market, and to ensure it as Reckitt employees and have been involved in key conversations
is competitive, to be effective in 2022. with the workforce allowing me to feed back employees’ views to
The basic NED fee is being increased by 3.3% to £95,000, with effect the Remuneration Committee as well as the Board. As set out in the
from 1 January 2021, with the proportion paid in shares being increased Strategic Report, each year the company holds several round-table
to 25% of the basic fee (£23,750). Going forward the amount of the fees discussions with employees and organises site visits during which town
paid in shares will remain at 25% of the basic fee. There are no changes hall meetings and smaller group discussions with our people take place.
to the additional fees for the SID, Committee Chair, Committee Member, During the year we also communicated to the wider workforce
or Designated Non-Executive Director for engagement with the details of how executive pay is set, its alignment with the company’s
Company’s workforce. approach to the wider company pay policy and how decisions are made
by the Committee and giving employees the opportunity to ask any
Context for remuneration in the wider workforce
questions on these topics.
The Remuneration Committee has considered the remuneration of
Further information on wider workforce remuneration, and how this
Reckitt’s wider workforce during the year and has been provided with
compares to the remuneration of our Executive Directors, is set out on
a comprehensive overview of workforce remuneration and related
pages 149 to 151.
policies, as well as the alignment of incentives and rewards with culture.
It reviewed information on salary structures, bonus design and targets, the
long-term incentive plan, share ownership, International Transfer Policy,
approach to employee benefits and the all-employee Share Plans. The
Committee is pleased to note from this review that the company’s
remuneration policies continue to be aligned with those of the Executive
Directors, with a cascade throughout the organisation. The Committee
also took wider workforce salary increases into account when determining
base salary increases for the CEO and CFO as discussed above.
The Committee was additionally closely involved with a review of the
reward strategy for employees below Board level, which was undertaken
following the CEO’s strategic review, to ensure continued alignment of the
overall reward framework with the new business strategy.
In the UK, Reckitt has been voluntarily paying the living wage for a
number of years and last year we formally joined nearly 6,000 Living
Wage Employers who are recognised as paying a living wage to
employees and contractors. This is our commitment to employees and
staff that they will receive a wage that exceeds not just the minimum
wage but recognises the actual cost of living in the UK.
Reckitt operates an award-winning all-employee share plan to foster
the culture of ownership amongst employees. This gives employees the
opportunity to save over a three-year period to purchase Reckitt shares
at a 20% discount to the share price at the start of the period. In offering
these plans, we make a conscious effort to ensure that they are all
inclusive and accessible to all colleagues. To facilitate this, we utilise a
global network of around 130 local coordinators and provide
communications in 27 languages in various formats, including letters to
employees without an email address and kiosks in factories to assist with
online enrolments. As a result, over half of Reckitt employees globally are
currently participating in one of the three share plans on offer.

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 D I R E C T O R S ’ R E M U N E R AT I O N R E P O R T C O N T I N U E D

Remuneration Policy and implementation

Our Remuneration Policy strives to ensure that the management team is rewarded appropriately for delivering against Reckitt’s strategic priorities,
reflect the global nature of our business and deliver significant benefits for shareholders.
We have renewed our Remuneration Policy in line with its three-year lifecycle in 2016 and 2019 and have made changes to our remuneration
structure and its implementation over the years in order to effectively respond to shareholder feedback; improve alignment of executive and
shareholder interests; focus on our pay for performance philosophy; and ensure compliance with market best practice. Notable features of our
Policy as a result of changes over recent years are as follows:

Notable best practice features of Reckitt’s Executive Director Remuneration Policy

Reinforcing shareholder alignment
• Bonus deferral; with one-third of any bonus
paid being deferred into awards over
Reckitt shares for three years.
• Two-year holding period for LTIP awards
• Shareholding requirements for Executive
Directors of over 1400% and 1000% of
salary1 for CEO and CFO respectively, which
are the most demanding in the UK market.
• Two year post-employment shareholding
requirement of 50% of the shareholding
requirement (or actual shareholding on
leaving if lower). Formal mechanism to
enforce this through our share plan
administrators.
Supporting business strategy
• Annual bonus drives the achievement of
both Net Revenue growth and adjusted
profit before income tax.
• Multiplicative approach ensures that
outperformance on both top line and
bottom line is required for maximum
payouts, whilst underperformance in one of
the performance metrics will reduce the
overall bonus payout despite
outperformance of the other.
• Replaced Earnings per share (EPS) as sole
performance measure for shares and
options to a more balanced approach,
aligned with the business strategy. The
weighting for LTIP awards is Net Revenue
growth at 50% of the award, Return on
capital employed (ROCE) 25% and EPS 25%.
Rewarding fairly and responsibly
• Reduced new CEO and new CFO pension
contribution to 10% of salary, in line with our
wider UK workforce.
• Reduced the CEO LTIP award level by more
than 60% from 2017 levels and implemented
a mechanism to annually review the
numbers of shares and options granted.
• Robust and thorough assessment of
performance in the round before
determining annual bonus payouts and LTIP
vesting.
• Malus and clawback provisions apply to
bonus and LTIP, expanded to include
corporate failure, in line with best practice
shareholder guidelines.

1. Based on the average closing price in Q4 2020 of £68.45

Conclusion
I trust that you will find this report a clear account of the way in which the Committee has implemented the Remuneration Policy during 2020 and
that I can count on your support as we put the Annual Report on Remuneration to a vote of shareholders at the upcoming AGM. As I have noted
above, we will be developing a new Remuneration Policy during 2021 for approval by shareholders at the 2022 AGM and we will consult with
shareholders as part of this process.

I would also like to acknowledge and thank my fellow Committee members for their diligence and service during the year.

Mary Harris
Chair of the Remuneration Committee
Reckitt Benckiser Group plc
15 March 2021

138 Reckitt Annual Report and Accounts 2020

 S T R AT E G I C R E P O R T
Remuneration at a glance
Reckitt’s compass
Put consumers
and people first
Do the
Build shared
right thing.
Seek out new
success opportunities
Always.
Strive for
excellence
Combining Reckitt’s compass, strategy and remuneration philosophy drives Reckitt’s remuneration principles
1. High proportion of variable pay
• Drive outperformance and shareholder value
• Stretching performance targets
2. Attract and retain the best global talent
• Engage highly performance-driven individuals
• Reflect global competitive practice across our industry peer group • Alignment across the business of metrics and ownership
Element Key features of Policy
Salary, benefits • Salary increases and
and pension pension contribution set
in context of wider
workforce
• Salaries and benefits set
competitively against
peers
Annual bonus (APP) • Target bonus of 120% of
salary for CEO and 100%
for CFO
• One-third deferred into
awards over Reckitt
shares for three years
• Malus and clawback
provisions apply
LTIP Performance • Three-year performance
shares period and two-year
holding period
• Malus and clawback
provisions apply until two
years after vesting
Performance • Options have seven years
options to exercise post-vesting
Shareholding • CEO: 200,000 shares
requirements • CFO: 100,000 shares
G OV E R N A N CE F I N A N C I A L S TAT E M E N T S
Reckitt’s strategic priorities Reckitt’s remuneration philosophy
Rejuvenate Reckitt to deliver
shareholder value
Restore organic top line growth Pay for
performance
Achieve sustainable increased
medium-term earnings growth
Maintain disciplined capital allocation
Strategic Shareholder
alignment alignment
3. Market-leading Share Ownership Policy
• Align the interests of management and shareholders
• A culture of ownership
4. Ensure alignment with strategy across the business
• Alignment of performance metrics with strategic priorities
How we implemented Link to strategy 2021 2022 2023 2024 2025 2026
for 2020
• 3% salary increase, in line • To enable the total
with wider workforce package to support
• Pension contribution of recruitment and retention
10% of salary in line with
the wider workforce in
the UK
• Targets set for Net • To drive strong Cash Deferred
Revenue growth and performance with APP APP
adjusted profit before significant reward for paid vests
income tax overachievement of
• Threshold performance annual targets linked to
results in zero payout, Reckitt’s strategic 
with maximum of 3.57x priorities
target for truly • Use of deferral for
exceptional performance longer-term shareholder
on both metrics alignment
• Assessment of
performance in the round
• Targets set for Net • To incentivise and reward Award Award Holding
Revenue growth (50%), long-term performance granted vests period
Return on capital and align the interests of ends
employed (25%) and Executive Directors with
Earnings per share (25% those of shareholders
equally split over actual • Two-year holding period
and constant FX) for longer-term Award Award Holding
• Performance conditions shareholder alignment granted vests period
are applied to both ends
performance shares and
options
• Assessment of
performance in the round
• Period of eight years • Promotes long-term
from appointment to alignment with
achieve shareholders
• Two-year shareholding • Promotes focus on
requirement post- management of
departure corporate risks
Reckitt Annual Report and Accounts 2020 139
 D I R E C T O R S ’ R E M U N E R AT I O N R E P O R T C O N T I N U E D

Remuneration at a glance:
Pay outcomes for current Executive Directors in the year
2020 fixed remuneration

Base salary Pension

CEO CFO1 CEO CFO
£950,000 £494,545 10% of salary 10% of salary

1. Salary is pro-rated as Jeff Carr joined the Board and was appointed
as CFO on 9 April 2020

2020 variable remuneration

Annual performance plan Long-term incentive plan

The performance outcomes for the annual bonus were 100% of Earnings per share growth, as measured for LTIP purposes, over the
maximum in light of achievement against both metrics, which is in line three-year period was -0.3% per annum. As this is below the threshold
with all other employees on the same Group-wide measures. A third is required of 6% per annum the LTIP will not vest for the period 2018-2020.
deferred, by way of an award over Reckitt shares. None of our current Executive Directors were with the Group at the time
these awards were granted.
Base salary Target Multiplier Delivery
Cash Shares
CEO £950,000 120%
3.57 2/3 1/3
CFO £494,545 100%

2020 single figure Executive Director shareholding

The single figure for 2020 is therefore comprised of the elements in the Reckitt operates a market-leading shareholding requirement with an
graph below. eight-year timeframe for achievement and a two year post-employment
holding period after leaving. The chart below illustrates the progress
CEO towards this of the Executive Directors.

CEO
CFO
Shareholding
0 1 2 3 4 5 6 requirement

Fixed Annual bonus (cash) Annual bonus (shares) Current

shareholding

In addition, Laxman Narasimhan received a buyout in respect of legacy CFO

arrangements from his previous employer, as detailed on page 146. Shareholding
requirement

Current
shareholding
0 50,000 100,000 150,000 200,000

Shareholding requirement
Shares held1 Shares deferred from annual bonus2 2021 vesting3

1. Includes shares owned outright and shares subject to post-vesting holding restrictions
2. This is the estimated number of shares awarded, after tax under the Deferred Bonus
Plan including those to be deferred from the 2020 annual bonus
3 For Laxman Narasimhan this is an estimated number of shares vesting in March 2021
under his buyout award, after tax

140 Reckitt Annual Report and Accounts 2020

 S T R AT E G I C R E P O R T G OV E R N A N CE F I N A N C I A L S TAT E M E N T S

Remuneration Committee governance

Who’s on the The Remuneration Committee is made up entirely of Non-Executive Directors who are appointed by the Board on the
Committee recommendation of the Nomination Committee. Membership of the Remuneration Committee during the year was as follows:

Mary Harris (Chair) Chris Sinclair

Nicandro Durante Elane Stock

In addition, Olivier Bohuon who joined the Board as a Non-Executive Director on 1 January 2021, has also been appointed onto
the Remuneration Committee with effect from the same date.

Our role The Committee’s purpose is to assist the Board of Directors in fulfilling its oversight responsibility by ensuring that the
Remuneration Policy and practices reward fairly and responsibly; are linked to corporate and individual performance; and take
account of the generally accepted principles of good governance.

On behalf of, and subject to approval by, the Board of Directors, the Committee primarily:
• sets and regularly reviews the company’s overall remuneration strategy;
• determines the general Remuneration Policy for senior executives; and
• in respect of the Chairman, the Executive Directors and members of the Group Executive Committee, sets, reviews and
approves:
– remuneration policies, including annual bonuses and long-term incentives;
– individual remuneration and compensation arrangements;
– individual benefits including pension and superannuation arrangements;
– terms and conditions of employment including the Executive Directors’ service agreements;
– participation in any of the company’s bonuses and LTIPs; and
– the targets for any of the company’s performance-related bonuses and LTIPs.
• reviews wider workforce remuneration and related policies and the alignment of incentives and reward with culture.

The Executive Directors and the company Chairman are responsible for evaluating and making recommendations to the
Board of Directors on the remuneration of the Non-Executive Directors.

Meetings During the year the Committee held four scheduled meetings and two additional meetings. The attendance of members
at meetings is set out in the table on page 106. In addition, during the year the Committee considered ad-hoc topics
between meetings.

The Chief Human Resources Officer was Secretary to the Committee throughout the year. Meetings were also attended by
the CEO, CFO, General Counsel & Company Secretary and the Group Head of Reward by invitation. Deloitte was the
appointed advisor to the Committee throughout the year.

Members of the Remuneration Committee and any person attending its meetings do not participate in any discussion or
decision on their own remuneration.

Peer group The Remuneration Committee has determined a peer group of international companies, which is referred to within the report.
This peer group is used for benchmarking remuneration packages and as a reference point in ensuring that performance
targets are appropriately stretching and when reviewing the company’s relative performance. This peer group is the same
group used to benchmark remuneration of senior managers across the company. The companies included are:

Abbott Laboratories Colgate Kimberly-Clark1 Procter & Gamble

Bayer Danone Kraft Heinz Sanofi
Campbell Soup1 GSK Nestlé Unilever
Church and Dwight Henkel Novartis
Clorox Johnson & Johnson PepsiCo1
Coca-Cola1 Kellogg1 Pfizer

1. Companies used for remuneration benchmarking only and not for performance comparison

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The table below summarises the key activities at the Committee’s meetings in 2020:

Meeting Topic

February 2020 • Reviewed performance to 2019 in respect of bonus outcomes and LTIP vesting
• Carried out assessment of wider performance of the company and Executive Directors
• Final approval of 2019 bonus and 2017-19 LTIP vesting
• Agreed 2020 LTIP performance measures and weighting
• Approved amendments to Deferred Bonus Plan rules
• Reviewed Directors’ Remuneration Report
March 2020 • Finalised 2020 APP targets
• Approved 2020 LTIP measures, definitions and targets, subject to shareholder consultation (subsequently finalised in April)
• Agreed approach to shareholder consultation
July 2020 • Reviewed 2020 AGM voting
• Review of wider workforce remuneration, including a deep dive on employee benefits
• Assessment of performance to date compared to 2020 bonus targets
September 2020 • Carried out review of the all-employee reward strategy and agreed roadmap for further review and implementation
• Agreed 2021 LTIP performance measures and weightings
• Reviewed and discussed approach to shareholder engagement
• Approved awards under all-employee share plans
November 2020 • Determined 2021 remuneration packages for Executive Directors
• Determined 2021 remuneration packages for Group Executive Committee members
• Agreed principles for 2021 bonus targets
• Reviewed updates to corporate governance and shareholder guidelines
• Reviewed shareholding for senior employees with share ownership requirements
• Agreed timeline and approach for review of Directors’ Remuneration Policy
• Reviewed data on remuneration packages for senior management below the Group Executive Committee
• Approved awards under all-employee share plans
• Approved revised Remuneration Committee terms of reference
• Considered the code of conduct of the Remuneration Consultants Group and the performance of advisor to the Committee
• Review of Remuneration Committee effectiveness
November 2020 • Determined 2021 fees for the Chairman
(second meeting) • Approved 2021 bonus targets

In addition, throughout the year the Remuneration Committee considers ad-hoc topics between meetings, such as the approval of remuneration
packages for new hires to the Group Executive Committee and final approval of LTIP targets and weightings following the shareholder consultation.

Reckitt’s Remuneration Policy
Reckitt’s Remuneration Policy reflects the philosophy of pay for
performance, shareholder alignment and strategic alignment over the
short, medium and long-term. The full Policy was approved by
shareholders at the AGM on 9 May 2019, and can be found in the 2018
Directors’ Remuneration Report, including notes, on pages 98 to 106. It is
also available on our website in the Corporate Governance section.
When determining the Policy, provision 40 of the Corporate
Governance Code was taken into account as follows:
• Clarity – arrangements are transparent, reflect shareholder alignment
and Reckitt’s strategic priorities, thereby effectively engaging with
the wider workforce and shareholders. The Committee consulted
with shareholders as part of the design phase of the policy and
communicated to the wider workforce details of how executive pay
is set, its alignment with the company’s approach to the wider pay
policy and how decisions are made by the Committee and giving
employees the opportunity to ask any questions on these topics.
• Simplicity – the Policy is simple and clear, comprised of fixed pay,
such as salary and benefits, pension schemes that are offered to
most of the workforce, plus variable pay which incorporates the
annual bonus, LTIP (performance share options and performance
share awards), and a clear Share Ownership Policy for senior
members of the business. Variable pay is set against financial targets
to incentivise short- and long-term financial performance and
alignment with shareholders.
• Risk – the malus and clawback provisions which apply to annual
bonus and LTIP awards encourage the right behaviours which lead to
long-term shareholder alignment and sustained value creation. The
Committee has discretion to adjust the formulaic bonus outcomes
both upwards and downwards.
• Predictability – the total of fixed pay, variable pay (target and
maximum) illustrated in the scenarios of total remuneration in our
Policy provide an estimate of the potential future remuneration of the
Executive Directors, including the total remuneration if a 50% share
price growth is achieved.
• Proportionality – there is a clear link between pay for performance
and link to business strategy, with stretching financial targets applied
to annual bonus payouts and LTIP vesting.
• Alignment to culture – financial targets apply to the Annual Bonus
and LTIP awards across the wider workforce to drive business
performance. These targets are reviewed on an annual basis. Malus
and clawback provisions apply to annual bonus and LTIP, and together
with deferred annual bonus, holding periods and share ownership for
the Executive Directors (and any other relevant senior employees),
drive the right behaviours expected within Reckitt. The remuneration
arrangements of the wider workforce reinforce employee
engagement.
The Committee is of the view that the current remuneration framework
remains fit for purpose and therefore we are not proposing to make any
major changes to the Policy for 2021. In line with the three-year lifecycle,
a new Remuneration Policy will be put forward to a binding shareholder
vote at the 2022 AGM. The Committee, alongside management, will be
working on the design of this new Policy during the course of 2021 and
we will consult with shareholders to gather feedback on the proposals
later on this year.

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 S T R AT E G I C R E P O R T G OV E R N A N CE F I N A N C I A L S TAT E M E N T S

Annual Report on Remuneration

The rest of this report sets out how we have implemented the
shareholder-approved Remuneration Policy in 2020, as well
as how we intend to implement it in 2021.
2020 performance and remuneration outcomes
Base salary
Base salaries are reviewed taking into account the salary increases for
the wider workforce and individual performance.
For additional context, the Remuneration Committee also reviews
market practice for similar roles in the company’s remuneration peer
group, comprising 21 international companies and listed on page 141.
As set out in last year’s report the Executive Directors received zero
salary increase with effect from 1 January 2020, with the salary for the
CEO remaining £950,000 and the salary for CFO £680,000.
During 2020, the Remuneration Committee reviewed salaries and
determined that there would be a 3% salary increase for the CEO and
CFO in 2021, taking into account company and individual performance, in
line with the average UK all-employee salary increase.
The table below sets out annual base salaries with effect from
1 January 2021:
Annual base
Annual base salary from
salary 1 January
Executive Director 2020 2021
Laxman Narasimhan £950,000 £979,000
Jeff Carr (from 9 April) £680,000 £700,000
The average salary increase for our UK employees was 3%, effective
1 January 2021.
Annual bonus in respect of 2020 performance
Executive Director 2020 bonus opportunity
In line with the Remuneration Policy, the CEO and the CFO had target
bonus opportunities of 120% of salary and 100% of salary respectively.
Actual payments can range from zero to 3.57x target depending on
performance against the stretching performance ranges as follows:
• For each performance measure a range is set.
• A performance multiplier is calculated for each measure, calculated
by the extent to which the performance for that measure is achieved.
These multipliers can be up to 1.89 for outperformance of the
stretching range set by the Committee.
• The two individual multipliers are then multiplied together to provide
the total performance multiplier.
• The effect of the multiplicative approach means that a
high‑performance multiplier can only be achieved for
outperformance on both top line and bottom line performance.
• Similarly, underperformance in one of the performance metrics
will reduce the overall bonus payout including to zero, despite
outperformance of the other.
• For example, if we grow Net Revenue above the stretching
requirement for maximum performance but fail to meet the profit
threshold, the bonus payout will be zero (i.e. 1.89 x 0).
• One-third of any APP is deferred into an award over Reckitt shares,
to strengthen alignment with shareholders.
2020 performance targets
The Remuneration Committee set targets for the Executive Directors at
the beginning of the 2020 financial year. As set out in last year’s report,
these were based on Net Revenue growth and adjusted profit before
income tax targets, both measured in GBP at a constant exchange rate.
They were primarily based on the business plan at the time, in light of the
CEO’s strategic review and with reference also being made to external
expectations of performance and market practice of companies in a
similar stage of the business cycle to Reckitt and the change in business
strategy. At the time the Committee finalised the targets, consensus
Percentage expectations were approximately 2.2% for Like-for-Like Net Revenue
increase growth and adjusted profit before income tax of £2.7 billion. In setting
targets, the Committee also had regard to competitor performance with
3%
average three- and five-year Like-for-Like growth in Net Revenue
3% amongst our peers being 2.7% and 2.8%, respectively.
As set out last year, following the CEO’s strategic review of the
business, 2020 was anticipated to be a transitional year where we
worked to rejuvenate Reckitt to accelerate growth and create long-term
shareholder value. We were targeting a higher level Like-for-Like Net
Revenue growth than we achieved in 2019. We also considered that
Reckitt’s rejuvenation would be funded by a temporary margin reduction
and enhanced multi-year productivity programme requiring investment
and changes to the organisation, the latter of which was largely
undertaken in 2020.
The Committee considers that these targets (as set out overleaf)
were set at stretching levels in this context. The targets have not been
adjusted during the year. At the beginning of the pandemic the
Committee decided to retain the original targets set pre-COVID-19
given uncertainty around what the full impact of the pandemic was
going to be, and to assess final outcomes against a robust performance
in the round framework as described overleaf and in the letter from the
Remuneration Committee Chair.

Net Revenue Adjusted profit

(Threshold = 0x
growth before tax Performance
multiplier
x multiplier
= multiplier
Target = 1.0x
Max = 3.57x)
(up to 1.89x) (up to 1.89x)

• The performance multiplier can range from zero for performance at

threshold or below, to 3.57 for truly exceptional performance on both
metrics (i.e. 1.89 x 1.89).
• This total performance multiplier is then applied to the target bonus
opportunity to calculate the overall bonus outcome.

Performance Final bonus

multiplier
x Target bonus = outcome

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2020 financial performance against APP targets Delivery of shareholder value

As stated earlier in the Annual Report, 2020 marked a year of strong One year TSR
execution for Reckitt under its new leadership team, driving record
Reckitt 10%
performance which underpinned progress towards sustainable
growth. Total Group Net Revenue grew to £13,993 million representing
Like-for-Like revenue growth of +11.8%, driven by strong volume Peer group 5%

growth (+9.6%) and an increase in price/mix (+2.2%). In particular,

FTSE 100 -10%
this was underpinned by very strong growth in Hygiene +19.5%
and Health +12.1%, with Nutrition being unchanged from last year. -10% -5% 0% 5% 10%
This improved execution and the investments in capability and
growth will enable us to achieve our revenue growth target a
year earlier than expected, and with greater confidence. £4,444m of shareholder value generated
For 2020, adjusted profit before income tax was £3.1 billion at a Market capitalisation as 43,061
constant exchange basis marking significant outperformance of both at 1 January 2020 (£m)
internal and external forecasts which took into account anticipated Shareholder value as
43,061 3,203 1,241
headwinds, investment costs to rejuvenate commercial capabilities, at 31 December 2020 (£m)
and finite-life transformation costs of £126 million. The Board made the 40,000 42,000 44,000 46,000 48,000
decision to take these fully into account in determining the adjusted Market capitalisation as at 1 January 2020 (£m) Increase in market capitalisation
operating profit used in APP bonus calculations. Dividends paid during 2020
In addition, other key highlights of 2020 performance include the
delivery of adjusted operating margin of 23.6%, outperforming the upper
quartile of competitors and an increase in free cash flow of 42.3% to Competitive performance
£3,052 million. Market share performance
The chart below illustrates this performance compared to the targets
set at the start of the year.

70%
Around 70% of top CMUs by Net
Threshold Maximum Revenue gained or held market share
Performance measure (zero bonus) (3.57 x target) Actual
in FY 2020

Net Revenue growth 0% 5% 11.8%

Adjusted profit before

£2.6bn £2.8bn £3.1bn
income tax
Like for Like NR growth significantly above peer group upper quartile
As illustrated above, 2020 Net Revenue growth and Adjusted profit Reckitt 11.8%
before income tax both significantly exceeded the maximum
performance targets set – resulting in a bonus multiplier of 3.57x target Peer group 3.7% 2.8%
average
(100% of maximum).
Peer group
Upper quartile 6.5%
Overall company performance taken into consideration
0% 2% 4% 6% 8% 10% 12%
As it does every year, the Committee thoroughly evaluated the
performance of both the company and the Executive Directors in the
round to assess whether the level of annual bonus payout is both
appropriate and justified. Adjusted Operating Margin at peer group upper quartile
In addition to the operational highlights set out above, over Reckitt 23.6%
2020 Reckitt has created nearly £4.5 billion of shareholder value,
including £1.2 billion in dividends, delivering a shareholder return Peer group
20.3%
average
of 10% in the 12 months to 31 December 2020, outperforming
our peer group (5% return) and the FTSE 100 index (-10% return). Peer group
23.5%
Upper quartile
During the year the company has reduced net debt by over £1.7
0% 4% 8% 12% 16% 20% 24%
billion through improved cash generation and maintaining a strong
fiscal discipline around funding of our investment programme
through enhanced productivity and outperformance. As a result,
Reckitt’s net debt leverage metric has improved with Net Debt /
Adjusted EBITDA falling from 2.9x at the end of 2019 to 2.4x. The
company’s full year dividend remains unchanged at 174.6p.

144 Reckitt Annual Report and Accounts 2020

 S T R AT E G I C R E P O R T
The Remuneration Committee also reviewed the progress on delivery of the new strategy and the wider purpose, people, culture and sustainability.
In particular this year, the Committee also considered the response to the impact of the COVID-19 pandemic on our people, customers and
consumers and other stakeholders, the company’s trading conditions and the operational disruption that it faced.
Significant strategic delivery
• Reorganised structure as of 1 July: Moved
to three category-focused Global Business
Units of Hygiene, Health and Nutrition, with
our China, eRB and Global Functions teams
integrated across each of these.
• Improved customer service capabilities:
Establishing centres of excellence for sales,
marketing, e-commerce and medical sales
and global customer relationship team;
significant improvement in third-party
Advantage survey of retailers – advancing
nine places, moving from the lowest tier to
top ten of FMCG peers.
• Invested in core capabilities: During 2020
we have invested a record £745 million in
enablers of growth including the rebuilding
of the long-term capabilities necessary to
improve customer service, R&D, innovation,
supply chain, sustainability and transforming
the company’s organisation, culture and
direction. This investment is significantly
ahead of plan, funded by P&L charge and
£407 million of productivity savings.
• Drove new business and channels:
Launched Global Business Solutions – our
professional business which is growing
strongly. Expanded Dettol and Lysol
footprints into 41 markets during the year
and e-commerce sales increased by 56% in
2020.
• Grew share and entered new markets:
Overall, around 70% of our top category
market units by revenue either gained or
held market share. Substantial market
growth including Dettol, Lysol, Finish,
Airborne, Gaviscon and Durex.
Notably in achieving all of the above, the company did not furlough any employees or use any government programmes for its benefit, other than
support that was mandated by governments where we had no choice or where customs processes were relaxed to allow easier imports of products
that were used to combat the virus.
G OV E R N A N CE
Purpose, people, culture and sustainability
• Launched the company’s new purpose,
fight and compass: This included our new
leadership behaviours to support the
cultural evolution of the business and
strengthen our environmental and societal
commitments.
• Embedded D&I: Introduced a number of
initiatives in 2020, including:
– Set up a D&I Board comprised of some
of our most passionate and senior
business leaders and chaired by the
CEO, to lead the D&I strategic agenda
across Reckitt;
– Engaged EY to conduct an independent
review of our D&I practices;
– Established the Stronger Together
conversation series, a five-year
commitment aimed at focusing on the
diversity and inclusion topics that matter
most to our people;
– Continued focus on gender diversity at
the manager and senior manager level.
• Launched the Freedom Forum: This is a
crowdsourcing platform for employees to
input into how we do things as part of
looking into the future of work, including
the implications of working digitally from a
practical, wellbeing and cultural standpoint.
The theme for the first forum, Workplace of
the Future, attracted more than 600 ideas
and over 10,000 votes.
• Further progressed sustainability
agenda: Launched climate pledge in
June 2020 for net zero carbon emissions by
2040. Improved Sustainalytics rating of 20.9
(from 23.5) over the past two years and
maintained our ‘A’ MSCI rating. Achieved our
target of 40% reduction in Greenhouse Gas
emissions per product since 2012, delivering
53% by 2020. Achieved our target of 35%
reduction in water use per product since
2012, delivering 39% by 2020.
Reckitt Annual Report and Accounts 2020
F I N A N C I A L S TAT E M E N T S
Response to COVID-19
• Prioritised safety and wellbeing:
Deepened the range of support provided
to employees impacted by the pandemic:
– Provided recognition and support to
frontline employees including monetary
bonuses, gift vouchers, free meals, care
packages and additional days of annual
leave;
– Developed ‘Navigating the new normal’
playbook which was shared externally
and also internally so that employees are
clear on how we are responding to the
pandemic and what it means for them;
– Furnished employees with free essential
Reckitt products including antiseptic
and disinfectants;
– Implemented a global policy of
providing financial support to enable
employees working at home to do so
safely;
– Ensured that all employees have access
to an Employee Assistance Programme;
– Recently launched a comprehensive
employee wellbeing programme with
external partners, involving significant
three-year investment. Enhanced our
focus on employee wellbeing and
mental health by sharing guidance,
including podcasts featuring tips from
Reckitt leaders on how to take care of
themselves, their loved ones and
colleagues, as well as providing
guidelines and training on remote
working;
– Paused global operations for two days
so colleagues could rest and recover.
Employee feedback during the year on the
company’s response was very favourable
and showed a highly motivated workforce,
strongly committed to our purpose and
fight.
• Improved supply chain performance and
capacity: Under exceptional circumstances,
sustained efforts by Reckitt’s teams
delivered increased capacity and sought to
maintain customer service to help meet
exceptional levels of demand due to
COVID-19.
• Increased our commitments to aid
programmes: This included making
significant donations to a number of causes,
particularly through the Reckitt Fight for
Access Fund and supplemented with
additional resources from savings during
the year, which boosted our COVID-19-
related funding to £52 million.
145
 D I R E C T O R S ’ R E M U N E R AT I O N R E P O R T C O N T I N U E D

Decision on 2020 bonus outcomes

The Committee believes that both the company and the Executive Directors followed our compass and responded both decisively and effectively
during the pandemic, enabling Reckitt to trade and perform successfully during 2020. The company also contributed to wider society during this
period as set out above. This, in addition to Reckitt’s overall excellent financial performance over 2020, the company’s payment of sustained
dividends to shareholders, the strategic progress, looking after our employees and also taking into account the exceptional work that has been
undertaken by executives to develop and instil the firm’s evolving culture and values, the Committee concluded that the formulaic outcome is
justified and no discretion would be applied.
Under the Remuneration Policy, one-third of the annual bonus will be delivered by way of an award over Reckitt shares and deferred for a
three-year period. The bonuses are as follows:

Performance Deferred into

Base salary x Target bonus x multiplier = Total bonus = Cash shares

Laxman Narasimhan £950,000 x 120% x 3.57 = £4,069,800 = £2,713,200 £1,356,600

Jeff Carr £494,545 x 100% x 3.57 = £1,765,526 = £1,177,017 £588,509
Adrian Hennah1 £185,455 x 100% x 3.57 = £662,074 = £441,383 £220,691

1. Served as Board Director from 1 January 2020 to 8 April 2020

Vesting of the 2018 LTIP – performance versus targets

The Reckitt LTIP is designed to align participants with shareholders through making awards with stretching performance conditions denominated in
both performance share options and performance share awards.
Vesting of awards under the 2018 LTIP, granted in December 2017, was dependent on adjusted diluted EPS growth over the three-year period
2018-2020. Threshold vesting of 20% required stretching EPS growth of 6% per annum, with full vesting requiring EPS growth of 10% per annum, i.e.
equivalent to 33% growth over the period. At the time that the awards were made, the peer group average EPS growth was 3% per annum with an
upper quartile of 7% per annum.
As disclosed in previous years, the 2018 EPS growth for LTIP purposes was calculated to exclude any one-off benefit from MJN and related
transactions. The EPS performance for LTIP purposes for the period 2018-2020 was a compound average annual growth of -0.3% per annum. This EPS
performance results in zero vesting being achieved when measured against the vesting schedule approved by shareholders. Based on this
performance assessment the 2018 LTIP awards to the former CEO and former CFO will lapse.

Vesting of buyout arrangements

Upon joining Reckitt, Laxman Narasimhan received awards to compensate for remuneration arrangements forfeited on leaving PepsiCo, his previous
employer. These awards relate to legacy arrangements implemented by his previous employer, remain subject to PepsiCo performance conditions
and mirror the form and the time horizons of forfeited awards. Full details of the buyout awards can be found on page 125 of the 2019 Annual Report.
As the PepsiCo performance is not known at the date of this report, we have estimated the vesting of this award with reference to the vesting of
the buyout awards in 2020, as set out in the table below. The estimated value of these awards is included in the 2020 single total figure of
remuneration for Laxman. These awards will vest in March 2021 and will be disclosed externally at that time with the actual vesting level being
restated in next year’s report.

Vesting % of Interests Share

CEO awards Target target1,2 vesting price3 Value

Long-term cash £1,252,751 102% n/a n/a £1,277,806

Share awards4 48,410 shares 75.6% 37,880 £68.45 £2,592,886

1. Estimated vesting based on previous buyout award that vested on 23 March 2020 as disclosed on page 127 of the 2019 Annual Report
2. The maximum level of vesting is 200% and 175% of target for the cash and share awards respectively
3. The estimated share price reflects the average closing price in Q4 2020 of £68.45
4. These awards will accrue dividend equivalents of Reckitt shares during the vesting period. An estimate of 1,282 Reckitt shares have been included in the shares vesting shown above

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 S T R AT E G I C R E P O R T G OV E R N A N CE F I N A N C I A L S TAT E M E N T S

Single total figure of remuneration for Executive Directors (audited)

The table below sets out a single figure for the total remuneration received by each Executive Director for the year ended 31 December 2020, based
on the information set out in the previous sections. This is compared to the prior year figure:

Current Executive Directors Former Executive Director

Laxman Narasimhan Jeff Carr1 Adrian Hennah2
2020 2019 2020 2019 2020 2019
£ £ £ £ £ £

Base salary 950,000 437,138 494,545 185,455 680,000

Taxable benefits3 251,689 328,732 12,201 17,736 99,201
Pension benefit4 95,000 43,714 49,455 45,818 168,000
Annual bonus5 4,069,800 220,318 1,765,526 662,074 285,600
LTIP6 n/a n/a n/a 0 0
Buyout arrangements7 3,870,692 3,568,713
Total (including buyout arrangements) 9,237,181 4,598,615 2,321,727 911,083 1,232,801
– Fixed Remuneration 1,296,689 809,584 556,201 249,009 947,201
– Reckitt Variable Remuneration (excl. buyouts) 4,069,800 220,318 1,765,526 662,074 285,600
Total (excluding buyout arrangements) 5,366,489 1,029,902 2,321,727 911,083 1,232,801

1. Joined the Board and was appointed as CFO on 9 April 2020

2. Stepped down from the Board on 9 April 2020. Shows the single figure for the period from 1 January 2020 to 8 April 2020
3. Benefits for Laxman Narasimhan include values for one-off relocation expenses and for ongoing annual benefits. The relocation expenses include family relocation expenses such as
shipping of household goods, flights to the UK and temporary accommodation. The ongoing annual benefits include a car and healthcare. For Adrian Hennah and Jeff Carr the
benefits include car/car allowance and healthcare. Where relevant the costs above include a gross up for tax
4. The company paid the Executive Directors a cash allowance in respect of pension provision to the value shown in the table above. These payments reflect the full pension provision
outlined in the Policy Table. Directors are only entitled to prospective pension on defined contribution basis, with no defined benefit accrual
5. Annual bonus reflects financial performance above the maximum level of the performance ranges set for the 2020 annual bonus; the Committee’s assessment of performance of
both the company and the Executive Directors in the round; and its determination that the level of annual bonus payout at maximum in line with the formulaic outcome is appropriate,
as set out on pages 143 to 146. One-third of this is deferred into share awards for three years
6. The LTIP vesting in 2020 is zero and therefore there is no share price appreciation included in this value
7. The buyout includes awards made to Laxman Narasimhan, related to legacy arrangements implemented by his previous employer, as detailed on page 125 of the 2019 Annual Report.
The calculation of the estimated value of the buyout awards due to vest in March 2021, which is included in the 2020 column above, is set out in the table on page 146 of this report.
This is based on the average closing Reckitt share price in Q4 2020 of £68.45 and assumes vesting in line with that in March 2020, including estimated accumulated dividends. The
actual value of vesting for this award, based on the share price on the date it is released, will be shown in the 2021 report. Based on the estimated calculation 12.3% of the value of
the share award included in the buyout vesting in March 2021 is attributable to share price growth over the vesting period

Executive Directors’ shareholding requirements (audited)

Executive Directors are expected to acquire significant numbers of shares over eight years and retain these until retirement from the Board.
We also have post-employment shareholding requirements for a further two years. This post-employment shareholding requirement is enforced
through a restriction on Executive Directors’ vested shares, held by our external share plan administrator, which requires company permission before
these shares can be sold. This restriction excludes shares awarded to the CEO as buyout for legacy awards in his previous employer and shares
purchased by the Executive Directors.
The table below shows the shareholding of each Executive Director against their respective shareholding requirement as of 31 December 2020:

Total Shares Performance shares Options held

Shareholding beneficial awarded
requirement interests under the Unvested, Unvested,
(number of (number of Deferred To vest in subject to Vested but To vest in subject to
shares) shares)1 Bonus Plan2 20213 performance not exercised 2021 performance

Laxman Narasimhan 200,000 42,104 13,196 20,076 150,000 0 n/a 300,000

Jeff Carr 100,000 20,000 4,556 n/a 40,000 0 n/a 80,000
Adrian Hennah4 200,000 147,900 2,573 0 59,902 59,204 0 119,803

1. ‘Total beneficial interests’ includes shares owned outright and shares subject to post-vesting holding restrictions
2. ‘Shares awarded under the Deferred Bonus Plan’ shows the estimated number of shares awarded under the Deferred Bonus Plan, after tax, including an estimate of those to be
deferred from the 2020 annual bonus
3. This is an estimate of the shares vesting to Laxman Narasimhan in March 2021 under his buyout award, in respect of legacy arrangements implemented by his previous employer, after
tax as detailed on page 146
4. Adrian Hennah stepped down from the Board on 9 April 2020. Total number of shares owned has been shown at this date

The Executive Directors are also eligible to participate in the all-employee Sharesave Scheme. Details of options held under this plan are set out on
page 157.

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 D I R E C T O R S ’ R E M U N E R AT I O N R E P O R T C O N T I N U E D

Shareholding of Executive Directors vs requirement

The bar chart below illustrates the Executive Directors’ shareholding versus the company’s shareholding requirements. Executives have a period of
eight years from appointment to achieve the requirements of 200,000 shares for the CEO and 100,000 for the CFO and both Executive Directors are
showing good progress towards meeting these requirements as reflected below.

CEO
Shareholding
requirement

Current
shareholding

CFO
Shareholding
requirement

Current
shareholding
0 50,000 100,000 150,000 200,000

Shareholding requirement
Shares held1 Shares deferred from annual bonus2 2021 vesting3

1. Includes shares owned outright and shares subject to post-vesting holding restrictions
2. This is the estimated number of shares under the Deferred Bonus Plan, after tax, including those to be deferred from the 2020 annual bonus
3. For Laxman Narasimhan this is an estimated number of shares vesting in March 2021 under his buyout award, in respect of legacy arrangements implemented by his previous
employer, after tax

2020 LTIP awards (audited)

The table below sets out the LTIP awards which were made to Laxman Narasimhan and Jeff Carr on 1 May 2020. These awards do not accrue
dividends during the performance period. Vesting of these awards in full requires achievement of stretching performance conditions over the
three-year period. Adrian Hennah was not granted a 2020 LTIP award.

Shares over Market price

which awards at date of Exercise Face Performance Exercise/vesting
Date of grant granted award1 price2 value3 period period Holding period

Performance shares
Laxman Narasimhan 1 May 2020 75,000 £65.70 n/a £4,927,500 1 Jan 2020- May 2023 1 January 2025
31 Dec 2022
Jeff Carr 1 May 2020 40,000 £65.70 n/a £2,628,000 1 Jan 2020- May 2023 1 January 2025
31 Dec 2022
Performance share options
Laxman Narasimhan 1 May 2020 150,000 £65.70 £65.20 £75,000 1 Jan 2020- May 2023- 1 January 2025
31 Dec 2022 May 2030
Jeff Carr 1 May 2020 80,000 £65.70 £65.20 £40,000 1 Jan 2020- May 2023- 1 January 2025
31 Dec 2022 May 2030

1. The market price on the date of award is the closing share price on the date of grant
2. The exercise price is based on the average closing share price over the five business days prior to the date of grant
3. For performance shares based on the market price at the date of award and assumes the performance criteria are met in order to achieve full vesting. For performance-based share
options based on the face value of the potential gain at award assuming full vesting, calculated as the difference between market price and exercise price. The face value of shares
under option is £9,855,000 for Laxman Narasimhan and £5,256,000 for Jeff Carr if calculated as the number of shares multiplied by the market price at date of award

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Following the announcement of the CEO’s strategic review in February 2020, the Remuneration Committee determined the appropriate performance
measures and targets, aligned with the updated strategic priorities, and carried out a comprehensive consultation with shareholders on the
proposals. The Committee duly considered the feedback from shareholders before finalising the performance conditions.
   In line with Reckitt’s Directors’ Remuneration Policy, vesting of the LTIP awards is dependent on the achievement of targets relating to growth in
Net Revenue, ROCE and EPS, aligned with the company’s strategic priorities. Net Revenue is measured as Like‑for‑Like growth over three years. ROCE
is measured based on the final year of the performance period and is a measure of how efficient the Group is at converting its capital into earnings.
As stated in our 2018 Annual Report the definition of ROCE used for the purposes of the LTIP differs from that disclosed in the Annual Report as it is
measured on a constant currency basis. In addition the targets set for 2020-2022 LTIP include the impairment made at the end of 2019, to ensure that
there was no benefit to LTIP participants from this impairment. The Remuneration Committee will also ensure that the recent goodwill impairment in
respect of IFCN does not lead to an increase in vesting in future years. EPS is measured on a total adjusted diluted basis, as shown in the Group’s
Financial Statements, as this provides an independently verifiable measure of performance. It is measured using both constant and actual foreign
exchange bases (with an equal weighting on each) and is based on the final year of the performance period.
Awards granted in 2020 will vest on the following schedule, which requires significant outperformance of targets. The four targets are weighted
as per the table below, and each element is considered independently.

Threshold Maximum
(20% vesting) (100% vesting)

Like-for-Like Net Revenue growth (3-year CAGR)

(50% weighting) 2% 5%
ROCE (final year)
(25% weighting) 11.8% 13.1%
EPS (final year) on a constant foreign exchange basis
(12.5% weighting) 323 pence 360 pence
EPS (final year) on an actual foreign exchange basis
(12.5% weighting) 302 pence 337 pence

In setting these targets the primary factors that the Remuneration Committee took into account were the updated strategic outlook and priorities,
the financial plan and external guidance to shareholders. In addition the Committee took into account a number of other reference points including
analyst consensus following the announcement of the new strategy and market practice in similar business situations to here at Reckitt (i.e. where
there has been a temporary margin reduction).
In deciding on these, the Committee set very stretching targets for the three-year performance period 2020-2022, which were also established at a
level to ensure that LTIP participants are motivated and incentivised to deliver on commitments to shareholders, without encouraging excessive
risk-taking. In line with its usual practice, the Committee will conduct a performance assessment in the round before determining final vesting outcomes.

Wider workforce pay arrangements

Reckitt cascades our reward policy fairly and consistently throughout the organisation and the Remuneration Committee takes into account the
arrangements for the wider workforce when setting Executive Director remuneration. During the year, the Committee considered workforce
remuneration and related policies on several occasions, as well as the alignment of incentives and rewards with culture. Information provided to the
Remuneration Committee includes salary structures, bonus design and targets, the long-term incentive plan, share ownership, our International
Transfer Policy, provision of benefits and Reckitt’s all-employee share plans. We also communicated to the wider workforce details of how executive
pay is set, its alignment with the company’s approach to the wider company pay policy and how decisions are made by the Committee and gave
employees the opportunity to ask any questions on these topics.
The Committee was also closely involved in the review of the reward strategy for employees below Board level, which was undertaken following
the CEO’s strategic review, to ensure continued alignment of the overall reward framework with the new business strategy. Following this review
changes were made effective 1 January 2021 to our approach to conducting salary reviews, the design of our annual performance plan and the
allocation of awards under our LTIP.
As mentioned in the Chair’s letter, we are pleased to report that none of our employees were furloughed during this unprecedented year and
the company offered a range of support for employees impacted by the pandemic, including ensuring all employees have access to an Employee
Assistance Programme, providing recognition (including financial) and support to frontline employees (particularly in supply, factories and sales),
providing financial support for employees working from home to support with purchase of essential equipment to enable a productive and safe
home working environment and providing free essential Reckitt products including antiseptic and disinfectants. We are also conscious that
people have worked extremely hard, so safety and wellbeing is a priority. In 2020, we paused global operations on two occasions so colleagues
could rest and recover and have recently launched a comprehensive employee wellbeing programme with external partners, involving a significant
three-year investment.
As discussed in the Strategic Report it is incumbent on us to work together to express our diversity and build equity and inclusion into everything
we do. We are reviewing our policies to ensure that they are inclusive by design and have launched several initiatives during 2020 to further embed
diversity and inclusion in our culture, including the establishment of a D&I Board chaired by our CEO and the commissioning of the specialist D&I
consultancy at EY to get an external perspective on where we are and where we could be.
As set out earlier in the Annual Report, our focus is on maintaining an open, transparent culture by promoting continuing dialogue across the
company. During 2020 Mary Harris’ activity as the Designated Non-Executive Director for engagement with the company’s workforce has allowed her
to feed back the views of the workforce to the Remuneration Committee as well as the wider Board. Each year the company holds several
roundtable discussions with employees and organises site visits during which town hall meetings and smaller group discussions with our people take
place. Details of this engagement are set out in the s172 Statement, which can be found on pages 58 to 61.

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The table below summarises the remuneration structure for the wider workforce:
Element Implementation below the Board
Salary Salary increases are determined by line managers based on factors such as
individual performance ratings, talent ratings and local market practice.
Country-specific conditions such as inflation are also taken into account.
The average total pay during 2020 to all employees across the Group is
£46,446 and we review pay ratios of the Chief Executive Officer’s total
remuneration to the remuneration of UK employees as set out on page 152
of this report.
In the UK, Reckitt has been voluntarily paying the living wage for a number
of years and last year we formally joined nearly 6,000 Living Wage
Employers who are recognised as paying a living wage to employees and
contractors. This is our commitment to employees and staff that they will
receive a wage that exceeds not just the minimum wage but recognises
the actual cost of living in the UK.
Annual bonus Our Annual Performance Plan (‘APP’) is operated consistently across the
organisation and has more than 15,000 employees participating. As
employees progress and are promoted their target bonus and maximum
multiplier typically increase.
In common with the Executive Directors, bonus payouts are based on
Reckitt’s financial performance, with all employees being incentivised on
Net Revenue and a profit measure, which varies based on role. In addition
some roles have a third measure related to market share, Net Working
Capital or innovation.
We also operate local bonus plans, for example for employees in sales and
factories.
Long-term Reckitt grants LTIP awards to members of the Group Executive Committee,
incentive Group Leadership Team and senior management team to support the
remuneration philosophy of incentivising superior long-term business
results and shareholder value creation. Awards are also made to selected
high-potential employees below these levels.
The 2021 awards will use the same performance measures and three-year
performance period as for the Executive Directors. Awards are made as a
fixed number of shares and share options with grants applied consistently
depending on an employee’s level in the organisation. Adjustments can be
made to the award level based on performance and managers can also
recommend additional awards to key employees.
All-employee We operate an award winning global all-employee share plan to foster our
share plans culture of ownership amongst employees. This gives employees the
opportunity to save over a three-year period to purchase Reckitt shares at
a discount to the share price. Around 55% of Reckitt employees have
signed up to one of our three share plans. In order to encourage take-up
and ensure that the plans are inclusive and accessible to all employees, we
utilise 130 local coordinators and provide communications in 27 languages
in various formats, including letters to employees without an email address
and kiosks in factories.
Over the last three-year period, 2018-2020, just over 9,250 employees
saved a total of £48 million1 to purchase Reckitt shares, making a gain of
around 16% over the period1.
150 Reckitt Annual Report and Accounts 2020
Comparison with Executive Director
remuneration
Salary increases are normally aligned with those
of the wider workforce, which take into account
performance.
Salaries are also set competitively against peers
in support of the recruitment and retention of
Executive Directors.
Annual bonuses for Executive Directors
are directly related to Reckitt’s financial
performance measured by Net Revenue growth
and adjusted profit before income tax targets.
These measures also apply to other Group
employees who participate in the APP.
The bonus for all participants in the APP
operates on a multiplicative basis, the same way
as for the Executive Directors.
One-third of annual bonus payments for
Executive Directors are subject to a three-year
deferral into awards over Reckitt shares.
Executive Directors’ LTIP grants are comprised
of performance share options and performance
share awards (based on a fixed number), which
vest subject to the achievement of Net
Revenue, ROCE and EPS performance targets.
In addition to the LTIP’s three-year performance
period, Executive Directors are subject to an
additional two-year holding period
commencing following the end of the
performance period.
Executive Directors are eligible to participate in
the all-employee Sharesave Scheme on the
same basis as all employees.
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Comparison with Executive Director

Element Implementation below the Board remuneration

Share ownership Reckitt is proud of our ownership culture. In addition to the market-leading
participation rates in our all employee share plans, members of the Group
Executive Committee and Group Leadership Team have shareholding
requirements in order to further align interests of management and
shareholders. These requirements are amongst the most demanding in the
market and we expect participants to meet them within eight years of
appointment. There is an annual review of progress by the Remuneration
Committee.
Amongst the Group Executive Committee the total shareholding
requirement is around £54 million1 and the aggregate actual holding is
currently £21 million1 which reflects good progress towards the
requirement given the changes to the Group Executive Committee over
the past year.
Overall the total shareholding requirement for all employees with
requirements is £127 million1, with the current actual holding being £75
million1. This also reflects good progress towards the requirement given
the number of new appointments made in light of the company’s strategic
transformation goals and reorganisation of structure.
The Executive Directors have shareholding
requirements of 200,000 shares for the CEO
and 100,000 for the CFO, the most demanding
requirements in the FTSE 100. These are
equivalent to over 1400% and 1000% of
salary1 respectively.
Executive Directors are additionally subject to
a post-employment shareholding requirement
which is enforced through restrictions put in
place by our share plan administrator.
The table on page 147 sets out the progress
of the Executive Directors towards their
shareholding requirements.

Pension A pension/gratuity scheme is offered to more than 70% of our global Our Executive Directors receive a company
employees. Exceptions to this are countries where pension provision is not pension contribution of 10% of salary, in line with
prevalent in the local market and/or is provided by the state. the wider workforce in the UK. They are eligible
to take this as a cash alternative.
In the UK all Reckitt employees are eligible to receive a company pension
contribution of 10% of pensionable salary irrespective of any personal
contribution made.

Benefits Reckitt regularly reviews the core benefits provided in each country to Executive Directors receive benefits which
ensure they remain appropriate and in line with our philosophy of providing consist primarily of the provision of a company
market competitive benefits. In addition to aligning with the local market car/allowance and healthcare. The CEO also
Reckitt ensures that there is a core level of benefits provided to all received relocation benefits.
employees. These include:
• Life insurance for all of our global employee population. The vast In addition, Executive Directors are eligible for
majority of employees are insured for at least two times base salary. the benefits available to the wider workforce,
Where the insurance is lower than this minimum we are currently described in this table.
working to improve it;
• Global parental leave policy which provides for at least 26 weeks paid
and 26 weeks unpaid maternity leave and four weeks paid and four
weeks unpaid paternity leave, for all employees. The policy recognises
that today’s families come in all shapes and sizes, so the same principles
apply to all LGBTQ+ employees, as well as including adopting and
surrogacy families;
• An Employee Assistance Programme is provided in every country,
providing valuable assistance to our employees during the pandemic
and beyond;
• Reckitt also provides health insurance, where it is not provided for by
the state, for most of our global employee population. In the UK and US
our healthcare insurer provides access to a video GP. This allows our
employees to speak to a doctor whenever they want.

Reckitt’s unique International Transfer Policy is key to ensuring global

mobility, which is a critical part of Reckitt’s career development and our
culture. Employees transfer consistently on a local terms basis, to remove
inequities of home/host practices, with benefits such as international
healthcare, international pension, school fees, tax return support and home
leave provided to foster ongoing mobility.

1. Based on the average closing price in Q4 2020 of £68.45

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Gender pay gap The calculations reflect the application of Reckitt’s reward policy
The Board also reviews the company’s gender pay gap and publishes an across the organisation as set out in the section on wider workforce
annual gender pay report that can be found on our website within the pay arrangements.
people and communities part of our Sustainability section. To increase In particular, the Remuneration Committee believes the pay ratio is
transparency on this issue Reckitt voluntarily discloses the gender pay consistent with the company’s wider policies on employee pay, reward
gap for our ten largest markets, which including the UK, together makes and progression. Reckitt ensures that employees are paid fairly for their
up around 70% of our global permanent workforce. role, based on the location they work in and their performance in role. As
As disclosed in our gender pay gap report Reckitt has set targets to such, the base salary, annual bonus and benefits are based on the same
increase the number of women in senior leadership positions and has a principles for the identified employees as they are for the CEO. The
number of initiatives to increase this representation. median pay ratio has increased from 2019 which reflects company
A summary of the gender pay statistics is also included below: performance as the CEO’s remuneration is heavily performance linked.
• The median gender pay gap in the UK for the year to April 2020 is In calculating the ratio we have used Option A, in line with
-6.1% at median and 5.1% at mean. shareholder guidelines. The employees used in the calculations were
• This compares to the year to April 2019 when the gender pay gap selected on 1 March 2021, following the end of the financial year.
was -3.8% at median and 6.8% at mean. For identifying the three employees at the lower quartile, median and
upper quartile, the following methodology has been used:
The table below sets out our additional voluntary disclosure for our other • All UK employees’ total remuneration as at 31 December 2020 has
largest markets: been considered, excluding leavers and employees who were absent
Gender pay gap1 for more than 20 days during the financial year, as these would distort
Mean Median the ratio.
difference difference • Full-time equivalent salary, variable pay, allowances and benefits
(using the part-time values and converting this to a full-time
Brazil -7.0% -22.7% equivalent values) have been calculated. In order to calculate the
China 11.6% 11.7% value of taxable benefits we have taken the P11D value, due to ease
India2 -167.8% -148.5% of accessing data. Actual pension contributions have been used, and,
Indonesia 20.5% 10.7% where appropriate, converted to full-time equivalents.
Mexico -0.8% -41.6%
Poland 9.1% 0.4% The table below summarises the identified employees in 2020:
Russia 18.6% 5.2%
Thailand 30.2% 18.6% 25th percentile Median pay 75th percentile
US 0.7% -11.4% Total employee pay and
benefits £34,553 £47,698 £84,433
1. A negative number represents a gender pay gap in favour of women
2. In India, 99% of our employees in manufacturing are male. The impact of these
Salary component £21,546 £42,146 £52,909
demographics has resulted in a significant median pay gap in favour of females
In addition, Note 5 to the Financial Statements sets out the total
Further data and information on the initiatives Reckitt is taking on employment costs and average number of employees globally, during
diversity and inclusion are set out in our gender pay gap report.  2020. Based on these, the average global pay during 2020 was £46,446
and therefore the subsequent ratio between the CEO and average
CEO pay ratio global employee was 1:199 or 1:116 if the buyout in respect of legacy
The table below provides pay ratios of the Chief Executive Officer’s total arrangements provided by the CEO’s previous employer is excluded.
remuneration to the remuneration of UK employees at the lower quartile,
median and upper quartile. This is in line with UK reporting requirements.
In line with the requirements, the total pay and benefits paid to both
Laxman Narasimhan and Rakesh Kapoor whilst in the role of CEO have
been combined to calculate the total CEO pay for 2019. It should be
noted that for Laxman this included both the one-off relocation benefits
and the buyout in respect of legacy arrangements provided by his
previous employer.
For 2020, we have also set out in the table the pay ratio excluding the
estimated value of the buyout awards to Laxman that are in respect of
legacy arrangements from his previous employer and which are due to
vest in March 2021. This is disclosed in the 2020 column of the single
figure table on page 147 of this report. The disclosure will, over time,
cover a ten-year rolling period.
25th 75th
percentile Median percentile
CEO Year Method pay ratio pay ratio pay ratio

Including buyout 2020 Option A 1:267 1:194 1:109

Excluding buyout 2020 Option A 1:155 1:113 1:64
2019 Option A 1:158 1:115 1:70

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Implementation of Directors’ Remuneration Policy for 2021 Other required disclosures

Salary
As set out earlier in this report, there will be a 3% increase in salaries for
2021 for the CEO and the CFO in line with the average increase for the
UK workforce. The CEO’s salary will be £979,000 and the CFO’s will be
£700,000.
Pension
The CEO and CFO are eligible to receive a pension contribution, or
equivalent cash allowance, of 10% of salary which is equivalent to the
company’s level of contribution for all UK employees.
Annual bonus in respect of 2021 performance
For 2021, there will be no change to the annual bonus opportunity of the
CEO and the CFO.
Bonuses for 2021 will be based on Reckitt’s Net Revenue growth and
adjusted profit before income tax targets, measured in GBP at a
constant exchange rate, with the outcome under each of the measures
combined multiplicatively to give a maximum bonus outcome of 3.57x
the target bonus opportunity if both targets are met.
Percentage change in the remuneration of Directors
In light of recent amendments to UK reporting regulations, companies
are required to publish the annual percentage change in remuneration
(salary or fees, benefits and annual bonus) for each Director compared to
the annual average percentage change in remuneration for the
employees (excluding Directors) of the parent company. Since the CEO is
the sole employee of Reckitt Benckiser Group plc, this statutory
disclosure is not possible. In the table below we are therefore voluntarily
disclosing the percentage change in remuneration for all UK employees
in order to provide a representative comparison.
The company considers UK employees to be an appropriate
comparator group as the Executive Directors’ remuneration
arrangements are similar in structure to the majority of these employees
and it reflects the economic environment where the Executive Directors
are employed. The analysis is based on a consistent set of employees, i.e.
the same individuals or roles appear in the 2019 and 2020 populations.
2019-2020

As previously noted in the Chair’s letter, as it does every Salary/fee Benefits Bonus
year the Committee will continue to evaluate the performance
All UK employees 1
4.5% 1.5% 2
505.4%
of both the company and the Executive Directors in the
Andrew Bonfield 4.1% n/a n/a
round and with regard to broader circumstances to assess
Jeff Carr (CFO)3 n/a n/a n/a
whether the level of annual bonus payout is appropriate and
justified, before determining the final bonus payout. Nicandro Durante 14.1% n/a n/a
We have not disclosed the performance target ranges for 2021 as Mary Harris 14.4% n/a n/a
we consider them to be commercially sensitive. However, we commit Adrian Hennah (former CFO)4 -72.7% -78.6% 131.8%
to retrospectively disclosing the performance ranges in the Directors’ Mehmood Khan 4.7% n/a n/a
Remuneration Report for the year ending 31 December 2021. Pam Kirby 7.3% n/a n/a
Sara Mathew5 109.3% n/a n/a
2021 LTIP awards
Laxman Narasimhan (CEO)6 117.3% -23.4% 1747.2%
The Remuneration Policy sets out the operation of the LTIP.
Chris Sinclair (Chairman) 10.0% n/a n/a
Further to the CEO’s strategic review of the company last year the
performance measures which applied to the 2020 LTIP award to Elane Stock 4.7% n/a n/a
Executive Directors were 50% based on Net Revenue, 25% based on Warren Tucker4 -61.9% n/a n/a
ROCE and 25% based on EPS (split equally between actual FX and Margherita Della Valle3 n/a n/a n/a
constant FX). The Committee believes that the performance measures
and weightings used for the 2020 LTIP award remain appropriate and 1. The percentages for “All UK employees” reflect the average percentage change in
full-time equivalent salary, taxable benefits and allowances, and bonus for colleagues
aligned with strategy and are therefore proposing no changes for the based in the UK in 2019 and 2020
2021 LTIP awards. 2. The percentage change in taxable benefits for all UK employees excludes international
As Laxman set out in our 2020 results announcement, the company transfer benefits as this is volatile from year to year based on each individual’s
is carrying out a strategic review of IFCN China and also announced circumstances
portfolio changes with the sale of Scholl and the acquisition of Biofreeze. 3. The following Directors were appointed to the Board during the year: Jeff Carr
(9 April 2020) and Margherita Della Valle (1 July 2020) and so no comparison to prior
Due to the continued uncertainty in the external environment related
year is shown
to the COVID-19 pandemic and the portfolio changes outlined in our 4. The following Directors left the Board during the year: Adrian Hennah (9 April 2020) and
2020 results announcement, the Committee currently intends to set Warren Tucker (12 May 2020) and so the comparison reflects remuneration delivered
the LTIP targets and announce them at the time the awards are made for service on the Board to the respective leave dates
in May 2021. They will also be set out in full in the 2021 Remuneration 5. Sara Mathew was appointed to the Board in July 2019 and the comparison reflects that
the 2019 fee was only received for part of the year
Report. In addition as the goodwill impairment in respect of IFCN
6. Laxman Narasimhan received no increase to his annual salary during 2020. The
reduces the capital employed it has the potential to increase the percentage change shown above reflects actual salary received during 2019 for
calculation of ROCE for LTIP purposes. The Committee will ensure service from his appointment on 16 July to 31 December 2019
that the impairment does not lead to an increase in vesting in respect
of the proportion of the LTIP related to ROCE in future years. The change in annual bonus for all UK employees reflects the
performance of the company in 2020 which resulted in higher bonuses
in 2020 compared to 2019. For reference, as disclosed last year, the
2019 annual bonus for UK employees was 71% lower than that paid in
2018 due to performance of the company in 2019 compared to 2018.
In addition to stronger company performance, the change in the annual
bonus for Laxman reflects a full year’s bonus for 2020 compared to a
pro-rated bonus received for his service as a Director from 16 July to
31 December 2019.

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Relative importance of spend on pay Other Directors

The table below shows shareholder distributions (i.e. dividends) and total No benefits or payments were delivered to former Directors in the year
employee pay expenditure for 2019 and 2020, along with the percentage in excess of the minimum threshold of a pre-tax value of £15,000 set by
change in both. the Remuneration Committee for this purpose.
% change
2020 £m 2019 £m 2019-2020 Performance graph
The graph below shows the TSR of the company and the UK FTSE 100
Total shareholder distribution 1
1,241 1,227 1.1% Index over the period since 1 January 2011. This shows the growth in the
Total employee expenditure2 2,302 1,882 22.3% value of a hypothetical holding of £100 invested on 31 December 2010.
The FTSE 100 Index was selected on the basis of companies of a
1. Details of shareholder distribution are set out in Note 28 to the Financial Statements comparable size in the absence of an appropriate industry peer group in
2. Details of employee expenditure are set out in Note 5 to the Financial Statements
the UK.
Exit payments made in the year (audited)
No exit payments were made to Executive Directors during the year.
Total Shareholder Return since 1 January 2011
Payments to past Directors (audited) £ value of £100 invested at 1 January 2011
Adrian Hennah stepped down from the Board on 9 April 2020 and retired 300
from the company on 21 October 2020. His remuneration arrangements
were detailed on page 133 of last year’s Annual Report. 250
As Adrian stepped down from the Board on 9 April 2020 the single
figure table sets out the remuneration for the period to 1 January 2020 to 200
8 April 2020 and reflects that his 2018 LTIP award will lapse. He remained
an employee of the company and received salary, benefits, pension 150
contributions and an annual bonus payment in respect of the period to
his retirement on 21 October 2020.
100
As disclosed in the 2019 Annual Report, the 2019 LTIP award will
remain subject to performance against the original performance
50
conditions, subject to a two-year holding period following the end of the
three-year performance period and will be pro-rated for time up to the
0
retirement date. He did not receive an LTIP award in 2020.
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Reckitt FTSE 100

Source: Thompson Reuters - Datastream

The table below sets out the single figure of total remuneration for the role of CEO over the last ten years.

(£000) 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

CEO single figure of remuneration

Laxman Narasimhan £4,5991 £9,2371
Rakesh Kapoor £4,497 £8,411 £6,840 £12,787 £25,527 £15,289 £8,999 £14,314 £938
Bart Becht £18,076
Annual bonus
(as a percentage of maximum) 31% 53% 100% 72% 100% 0% 0% 84% 12%2 100%
LTIP vesting 100% 100% 40% 40% 80% 50% 50% 65% 0%3 n/a3

1. Includes buyouts in respect of legacy arrangements from previous employer

2. Zero for Rakesh Kapoor
3. Laxman Narasimhan was not with the Group at the time these awards were granted

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Single total figure of 2020 remuneration for Non-Executive Directors and implementation for 2021 (audited)
The following Non-Executive Director fee policy was in place for the year ended 31 December 2020. The table also sets out the fees that will apply
from 1 January 2021.
2020 fees 2021 fees
Fee delivered Fee delivered
in Reckitt in Reckitt
Role Cash fee shares Cash fee shares

Base fees
Chairman £412,500 £137,500 £427,500 £142,500
Non-Executive Director £70,250 £21,750 £71,250 £23,750
Additional fees
Chair of Committee £35,000 – £35,000 –
Member of Committee £20,000 – £20,000 –
Designated Non-Executive Director for engagement with the company’s workforce £20,000 – £20,000 –
Senior Independent Director £30,000 – £30,000 –

The fee for the Chairman has been increased to £570,000, an increase of 3.6%; broadly in line with salary increases for the broader workforce in the
UK. 25% of the fee continues to be paid in shares. When considering this fee, the Committee considered performance in the role to date and
increased time commitment. The fees remain below the lower quartile for the Chair of FTSE 30 companies. It is the Committee’s intention to further
review the Chairman’s fee during 2021 with any potential increase to align the fee with market, and to ensure it is competitive, to be effective in 2022.
The base fee for NEDs has been increased to £95,000, an increase of 3.3%, broadly in line with the average salary increase across the UK
workforce. The proportion delivered in Reckitt shares has been increased to 25% of the base fee (£23,750). Going forward the proportion paid in
shares will be maintained as 25% of the base fee.
The table below sets out a single figure for the total remuneration received by each Non-Executive Director for the year ended 31 December
2020 and the prior year:
2020 fees 2019 fees
Cash Shares Total Cash Shares Total

Chris Sinclair £412,500 £137,500 £550,000 £375,000 £125,000 £500,000

Andrew Bonfield £105,250 £21,750 £127,000 £96,875 £25,125 £122,000
Nicandro Durante £140,250 £21,750 £162,000 £125,250 £16,750 £142,000
Mary Harris £125,250 £21,750 £147,000 £111,717 £16,750 £128,467
Mehmood Khan £90,250 £21,750 £112,000 £81,875 £25,125 £107,000
Pam Kirby £125,250 £21,750 £147,000 £120,250 £16,750 £137,000
Sara Mathew £90,250 £21,750 £112,000 £45,125 £8,375 £53,500
Elane Stock £90,250 £21,750 £112,000 £84,667 £22,333 £107,000
Warren Tucker1 £32,948 £7,789 £40,737 £90,250 £16,750 £107,000
Margherita Della Valle2 £45,125 £10,875 £56,000 – – –

1. Warren Tucker stepped down from the Board on 12 May 2020. Fees shown were paid to this date
2. Margherita Della Valle joined the Board on 1 July 2020. Fees shown are paid from this date

Travel and expenses for Non-Executive Directors are incurred in the normal course of business, for example, in relation to attendance at Board and
Committee meetings. The costs associated with these are all met by the company.

Summary of shareholder voting at the 2020 AGM

The following table shows the results of the voting on the 2019 Directors’ Remuneration Report at the 2020 AGM and 2019 Directors’ Remuneration
Policy at the 2019 AGM:
Votes
Votes for For % Votes against Against % Total withheld

Approve the 2019 Directors’ Remuneration Report 437,225,382 83% 90,262,684 17% 527,488,066 6,722,492
Approve the Directors’ Remuneration Policy 461,396,628 87% 66,134,073 13% 527,530,701 1,370,761

The Remuneration Committee has had extensive discussions with shareholders with a view to obtaining shareholder support for our remuneration
arrangements. In particular, in 2019, following a comprehensive consultation with our major shareholders, we made a number of changes to the
Remuneration Policy, to further align Executive Directors’ remuneration with shareholders’ interests. This resulted in shareholders supporting the 2018
Directors’ Remuneration Report and the Directors’ Remuneration Policy, with a significantly increased margin of support compared to the previous
vote on Policy in 2016.
The Chair of the Remuneration Committee continued to have ongoing dialogue with shareholders during 2020 on matters such as the overall
structure of remuneration as well as the performance measures and targets used for LTIP awards.

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Directors’ service contracts

Non-Executive Directors have letters of engagement which set out their duties and time commitment expected. They are appointed for an initial
three-year term, subject to election and annual re-election by shareholders. Appointments are renewable for subsequent three-year terms by mutual
consent. Details are set out below:
Length of service as at
31 December 2020
Name Date of appointment Years Months

Chris Sinclair 10 February 2015 (appointed Chairman from 3 May 2018) 5 11

Andrew Bonfield 1 July 2018 2 6
Nicandro Durante 1 December 2013 7 1
Mary Harris 10 February 2015 5 11
Mehmood Khan 1 July 2018 2 6
Pam Kirby 10 February 2015 5 11
Sara Mathew 1 July 2019 1 6
Elane Stock 1 September 2018 2 4
Margherita Della Valle 1 July 2020 0 6

Note: On 17 December 2020 the company announced the appointment of Non-Executive Director Olivier Bohuon to the Board effective 1 January 2021

Executive Directors’ service contracts contain a 12-month notice period, as set out in the Directors’ Remuneration Policy. Laxman Narasimhan was
appointed to the Board as CEO-Designate on 16 July 2019 and became CEO on 1 September 2019. Jeff Carr was appointed to the Board as CFO on
9 April 2020. Directors’ service contracts and letters of engagement are available for inspection at the registered office.

Advisors
Deloitte LLP (Deloitte) was appointed by the Remuneration Committee as independent advisor effective from 1 January 2014 following a review of
the advisor in late 2013. The Committee undertakes due diligence periodically to ensure that Deloitte remains independent of the company and that
the advice provided is impartial and objective. Deloitte is a founding member and signatory of the Code of Conduct for Remuneration Consultants,
details of which can be found at www.remunerationconsultantsgroup.com. During 2020, Deloitte LLP also provided the Group with advice in
numerous areas, including corporate and employment taxes, wider reward strategy, GPG assurance, global mobility and advisory and technology
consulting. These services were provided under separate engagement terms and the Committee is satisfied that the provision of these services did
not impair Deloitte’s ability to advise the Committee independently. Deloitte’s total fees for the provision of remuneration services were £316,400 on
the basis of time and materials.
It should be noted that although we are required to only disclose the value of fees for services which materially assisted the Remuneration
Committee, as with previous years, we have disclosed the full value of remuneration services from Deloitte which includes advice to management
and to the Remuneration Committee.

Directors’ interests in shares and options under the LTIP1 (audited)

Exercised/ Market
vested during Market price at
the year price at date of
Granted (including Lapsed Option date of exercise/
Grant during the dividend during the At price award vesting Exercise/vesting
date At 1.1.20 year shares)2 year 31.12.20 (£) (£) (£) period

Laxman Narasimhan
Performance-based share options 05.08.19 150,000 0 – – 150,000 63.72 May 22-Aug 29
01.05.20 0 150,000 – – 150,000 65.20 May 23-May 30
Performance-based share awards 05.08.19 75,000 0 – – 75,000 59.72 May 22
01.05.20 0 75,000 – – 75,000 65.70 May 23
Buyout awards2 05.08.19 71,557 0 31,257 40,644 0 59.72 58.65 Mar 20
05.08.19 84,717 0 – – 84,717 59.72 Mar 21
Jeff Carr
Performance-based share options 01.05.20 80,000 – – 80,000 65.20 May 23-May 30
Performance-based share awards 01.05.20 40,000 – – 40,000 65.70 May 23

1. Vesting of these awards is subject to performance conditions set by the Remuneration Committee
2. Buyout awards in respect of legacy awards from previous employer that vest subject to PepsiCo performance and include 344 dividends accrued on vested shares

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Directors’ interests in shares in the Deferred Bonus Plan1 (audited)

Market
Market price at
Granted Exercised/ Lapsed price at date of
Grant during the vested during during the Option date of vesting Vesting
date At 1.1.20 year the year year At 31.12.20 price (£) award (£) (£) period

Laxman Narasimhan
Deferred Bonus Plan 23.03.20 0 1,259 – – 1,259 58.35 – Mar 23
Deferred Bonus Plan2 23.03.20 0 3,832 – – 3,832 58.35 – Mar 23

1. One-third of the annual bonus is delivered in the form of conditional share awards which are deferred for three years
2. One-third of the payment made by Reckitt in respect of the PepsiCo bonus that was forfeited by joining Reckitt. The award was made on the same terms as the other
aforementioned award under the Deferred Bonus Plan

Executive employees may also participate in the all-employee Sharesave Scheme on the same basis as all other employees. The table below details
options held.
Granted Exercised Market price
Grant during the during the Lapsed during At Option price at exercise
Sharesave Scheme date At 1.1.20 year year the year 31.12.20 (£) (£) Exercise period

Laxman Narasimhan 02.09.19 379 0 – – 379 47.44 – Feb 23-Jul 23

There have been no changes to the Directors’ interests as set out in the above tables between 31 December 2020 and 15 March 2021.
Directors’ interests in the share capital of the company (audited)
The Directors in office at the end of the year and those in office at 15 March 2021 had
the following beneficial interests in the ordinary shares of the company:

15 March 31 December 31 December

2021 2020 2019

Olivier Bohuon1 - - -
Andrew Bonfield 403 403 226
Jeff Carr 20,000 20,000 –
Nicandro Durante 883 883 718
Mary Harris 2,554 2,554 2,323
Adrian Hennah2 – 147,900 147,900
Mehmood Khan 399 399 227
Pam Kirby 3,768 3,768 3,596
Sara Mathew3 244 244 75
Laxman Narasimhan 42,104 42,104 –
Chris Sinclair 9,906 9,906 5,138
Elane Stock 2,246 2,246 2,061
Warren Tucker4 – 3,614 3,614
Margherita Della Valle 74 74 –

1. Olivier Bohuon was appointed to the Board on 1 January 2021

2 Adrian Hennah stepped down from the Board on 9 April 2020. His interest in shares is shown up to this date
3. Sara Mathew held her shares in the form of 1,222 American Depository Receipts (ADR). Each ADR is equivalent to five ordinary shares at 10 pence each in the company
4. Warren Tucker stepped down from the Board on 12 May 2020. His interest in shares is shown up to this date
5. No person who was a Director (or a Director’s connected person) on 31 December 2020 and at 15 March 2021 had any notifiable share interests in any subsidiary
6. The Company’s Register of Directors’ Interests (which is open to inspection) contains full details of Directors’ shareholdings and options to subscribe for shares

As approved and signed on behalf of the Board of Directors.

Mary Harris
Chair of the Remuneration Committee
Reckitt Benckiser Group plc
15 March 2021

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 R E P O R T O F T H E D I R E C TO RS

Introduction Results and dividends

The Directors present their report, together with the Financial
Statements of the Group for the year ended 31 December 2020, in
accordance with s415 of the Companies Act 2006 (CA 2006).
In accordance with s414C (11) of CA 2006 certain matters required to
be included in this Directors’ Report are included in the Strategic Report
on pages 01 to 93. The Strategic Report includes an indication of the likely
future developments of the business, research and development activities
of the Group and details of important events affecting the company. The
Corporate Governance Report can be found on pages 102 to 112 and is
deemed to be incorporated into this Directors’ Report by reference.
Further disclosure requirements contained in CA 2006, Schedule 7
of the Large and Medium-sized Companies and Groups (Accounts and
Reports) Regulations 2008, Part 3 of the Companies (Miscellaneous
Reporting) Regulations 2018, the Financial Conduct Authority’s (FCA)
Listing Rules and the Disclosure Guidance and Transparency Rules,
which are deemed to form part of the management report can be
found on the following pages of the Annual Report for the year ended
31 December 2020, and are incorporated into this Directors’ Report
by reference:
Page
Acquisitions and disposals 218
Awards under employee share schemes and 214-217
long-term incentive schemes
Corporate Governance Statement including 102-112
internal control and risk management
statements
Statement of Directors’ Responsibilities, 161
including disclosure of information to the
Auditor
The Consolidated Income Statement can be found on page 174. The
consolidated income for the year attributable to equity shareholders of
the company is £1,187m. The loss for the year attributable to equity
shareholders of the company amounted to £79m.
The Directors resolved to pay an interim dividend of 73.0 pence per
ordinary share (2019: 73.0 pence), which was paid to shareholders on
29 September 2020.
The Directors recommend a final dividend for the year of 101.6 pence
per share (2019: 101.6 pence) which, together with the interim dividend,
makes a total dividend for the year of 174.6 pence per share (2019: 174.6
pence). During the year no shareholders waived their right to receive
dividend payments.
The final dividend, if approved by the shareholders at the forthcoming
Annual General Meeting of the company, will be paid on 14 June 2021 to
shareholders on the register at the close of business on 7 May 2021.
Directors
Details of the company’s Directors who served during the financial year
ended 31 December 2020 can be found on pages 94 to 98.
The rules governing the appointment and retirement of Directors
are set out in the company’s Articles of Association (the Articles) and all
appointments are made in accordance with the UK Corporate Governance
Code 2018 (the Code). Under the terms of reference of the Nomination
Committee, all Director appointments must be recommended by the
Nomination Committee for approval by the Board of Directors.
All Directors must submit themselves for re-election each year at
the AGM. At the 2021 AGM all Directors will offer themselves for election
or re-election in compliance with the Code. Details of the Directors
standing for election or re-election can be found in the 2021 Notice
of Annual General Meeting. Information on the service agreements of
Executive Directors can be found in the Directors’ Remuneration Report
on pages 134 to 157. The letters of appointment of the Non-Executive
Directors are available for inspection at the company’s registered office.

Disclosure of Greenhouse Gas (GHG) emissions 57 Powers of Directors

Employment policy and employee involvement
Engagement with employees, suppliers,
customers and others
Environmental, social and governance (ESG)
matters
Financial risk management and financial
instruments
Future developments in the business
The Board of Directors is responsible for the management of the
159-160
business of the company and may exercise all powers of the company
58-61 subject to the provisions of the company’s Articles and CA 2006.
The Articles contain specific provisions and restrictions regarding the
48-57 company’s power to borrow money. Powers relating to the alteration of
share capital are also included in the Articles and shareholders are asked
to renew such authorities each year at the AGM. A copy of the Articles is
197-204 available on the company’s website at www.reckitt.com or can be
obtained upon written request from the Company Secretary or the UK
01-93 Registrar of Companies, Companies House.

Post Balance Sheet events 218 Directors’ insurance and indemnities

The company indemnifies the Directors and Officers of the company
Research and development activities 12-57
and any Group subsidiary to the extent permitted by s236 of CA 2006
Shareholder information 237-239 in respect of the legal defence costs for claims against them and
Sustainability and corporate responsibility 12-57 third-party liabilities. The indemnity would not provide cover for a
Director or Officer if that individual was found to have acted fraudulently
Viability Statement 93 or dishonestly. The Directors’ and Officers’ liability insurance cover was
Charitable donations 238 maintained throughout the year ended 31 December 2020 at the
company’s expense.
Subsidiary undertakings (including overseas 225-236
branches) Directors’ interests
A statement of Directors’ interests in the share capital of the company
Information on the Board’s stakeholder engagement and activities is set is shown on page 157 of the Directors’ Remuneration Report. Details
out in the s172 Statement, which can be found on pages 58 to 61. of Executive Directors’ options to subscribe for shares in the company
There is no additional information requiring disclosure under Listing are included on page 156 in the audited part of the Directors’
Rule 9.8.4R. Remuneration Report.
During the year, none of the Directors had a material interest in any
derivative or financial instrument relating to the company’s shares.
Details of the Directors’ remuneration are disclosed in the Directors’
Remuneration Report on pages 134 to 157.

158 Reckitt Annual Report and Accounts 2020

 S T R AT E G I C R E P O R T G OV E R N A N CE
No Director has a material interest in any ‘contract of significance’ (as
defined by the FCA) to which the company, or any of its subsidiary
undertakings, is a party as at 31 December 2020.
Share capital
As at 31 December 2020, the company’s issued share capital consisted
of 736,535,179 ordinary shares of 10 pence each of which 712,735,087
were with voting rights and 23,800,092 ordinary shares were held in
treasury. Each share carries the right to one vote at general meetings of
the company. Details of changes to the ordinary shares issued and of
options and awards granted during the year are set out in Notes 24 and
25 to the Financial Statements. The rights and obligations attached to
the ordinary shares are contained in the company’s Articles. There are
no restrictions on the voting rights attached to the company’s ordinary
shares or the transfer of securities in the company except in the case of
transfers of securities:
• that certain restrictions may from time to time be imposed by laws
and regulations (for example, insider trading laws); and
• pursuant to the Listing Rules of the United Kingdom Listing Authority
whereby certain employees of the company require the approval of
the company to deal in the company’s ordinary shares.
No person holds securities in the company which carry special voting
rights with regard to control of the company. The company is not aware
of any agreements between holders of securities that may result in
restrictions on the transfer of securities or on voting rights.
Allotment of shares
At the 2020 AGM, authority was granted to the Directors under s551 of
CA 2006 to allot shares or grant rights to subscribe for, or convert any
security into shares of the company. The authority granted to the
Directors will expire at the conclusion of this year’s AGM. At the 2021
AGM, a resolution will be proposed to the shareholders to renew the
Directors’ authority to allot equity shares representing approximately
one-third of the company’s issued share capital as at the latest
practicable date prior to the publication of the Notice of AGM.
In accordance with the Investment Association Share Capital
Management Guidelines, Directors will once again seek authority to allot
further ordinary shares, in connection with a pre-emptive offer by way of
a rights issue, up to a further one-third of the company’s existing issued
share capital on the same date. The authorities sought would, if granted,
expire at the earlier of six months after the company’s next accounting
reference date, or at the conclusion of the AGM of the company held in
2022, whichever is the sooner.
Under s561 of CA 2006, shareholders have a right of first refusal in
relation to certain issues of new shares. A special resolution will also be
proposed to renew the Directors’ power to make non-pre-emptive
issues for cash up to a nominal amount representing less than 10% of the
company’s issued share capital as at the latest practicable date prior to
the publication of the Notice of AGM. The resolution would also permit
Directors, within the same aggregate limit, to sell for cash, shares that
may be held by the company in treasury.
In accordance with the Pre-Emption Group’s Statement of Principles,
the Investment Association Share Capital Management Guidelines and
the Pensions and Lifetime Savings Associations’ Corporate Governance
Policy and Voting Guidelines 2019, the Directors confirm their intention
that, other than in relation to a rights issue, no more than 5% of the issued
ordinary share capital of the company, exclusive of treasury shares, will
be issued for cash on a non-pre-emptive basis and no more than 7.5% of
the share capital of the company, exclusive of treasury shares, will be
allotted for cash under a non-pre-emptive basis over a rolling three-year
period without prior consultation with shareholders, in each case other
than in connection with an acquisition or specified capital investment
which is announced contemporaneously with the allotment or which has
taken place in the preceding six-month period and is disclosed in the
announcement of the allotment.
Reckitt Annual Report and Accounts 2020
F I N A N C I A L S TAT E M E N T S
This authority will maintain the company’s flexibility in relation to future
share issues, including issues required to finance business opportunities,
should appropriate circumstances arise.
Authority to purchase own shares
Authority was granted to the Directors at the 2020 AGM for the purposes
of s701 of CA 2006 to repurchase shares in the market and this authority
remains valid until the conclusion of this year’s AGM. There were no share
repurchases during 2020.
At the 2021 AGM, the Directors will seek to renew the authority
granted to them. Such authority, if approved, will be limited to a
maximum of 71,300,000 million ordinary shares, representing less than
10% of the company’s issued ordinary share capital (excluding treasury
shares) calculated as at the latest practicable date prior to publication of
the Notice of AGM, and sets the minimum and maximum prices which
may be paid.
The company’s present intention is to hold shares acquired under this
authority in treasury to satisfy outstanding awards under employee share
incentive plans.
Change of control and significant agreements
There are a number of agreements that take effect, alter or terminate
upon a change of control of the company following a takeover, such as
commercial contracts, bank agreements, property lease arrangements
and employee share plans. The Shareholder agreement between the
company and JAB Holdings B.V. (JAB) at the time of the merger in 1999
entitled JAB to nominate Board Directors. A holding in excess of 20%
or 10% of the company’s ordinary shares entitles JAB to nominate two
Directors or one Director respectively. JAB’s current holding is below this
amount and there is currently no nominated Director on the Board. None
of these are deemed to be significant in terms of their potential impact
on the business of the Group as a whole.
There are no significant agreements between the company and its
Directors or employees providing for compensation for loss of office
or employment that occurs because of a takeover bid, except that
provisions of the company’s share plans may cause options and awards
granted under such plans to vest on a takeover, and if the employment
of an Executive Director or other employee is terminated by the
company following a takeover then there may be an entitlement to
appropriate notice and/or compensation as provided in applicable
contracts or terms of employment.
There is no information that the company is required to disclose
about persons with whom it has contractual or other arrangements
with, which are essential to the business of the company.
Employees
During 2020, the Group employed over 43,500 (2019: 42,400) employees
worldwide, of whom 4,328 (2019: 4,025) were employed in the UK. The
Group is committed to the principle of equal opportunity in employment:
no applicant or employee receives less favourable treatment on the
grounds of nationality, age, gender, religion, race, ethnicity or disability.
Employment applications are considered on the basis of a person’s
aptitude and ability, and fair consideration is given to all applications
regardless of nationality, age, gender, religion, race, ethnicity or disability.
Where an employee has an existing disability or becomes disabled
during their employment, every practical effort is made to assist the
employee in continuing their employment and arranging appropriate
training. All employees, including those with a disability, are treated
in a fair and inclusive way throughout their careers, whether that
means accessing training, development opportunities or when
seeking job progression.
159
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It is essential to the continued improvement in efficiency and Independent Auditor

productivity throughout the Group that each employee understands
the Group’s strategies, policies and procedures. Open and regular
communication with employees at all levels is an essential part of the
management process. The Group operates multi-dimensional internal
communications programmes which include the provision of a Group
intranet and the publication of regular Group newsletters. Opinions of
employees are sought on a variety of issues through mechanisms
including global surveys, opinion polls, team meetings and feedback
forums. Further information on the Group’s employee engagement
activities is included on pages 41 to 43.
A continuing programme of training and development reinforces the
Group’s commitment to employee development. The Group aims to
provide all employees with equal opportunities and the Freedom to
Succeed at work and recognises the importance of employee health
and wellbeing. Reckitt’s values create an inclusive environment for
employees to act with integrity, responsibility and consistency in line
with our renewed purpose, fight and compass set out on pages 10 to 11.
Employee matters, incentives and share ownership
Group incentive schemes reinforce financial and economic factors
affecting the performance of the business. Employees typically have
three to five performance objectives which are directly linked to their
job and their specific contribution to the overall performance of the
Group. In addition, presentations, videos and Q&A sessions are held for
employees around the world on publication of the Group’s financial
results to provide employees with awareness of the financial and
economic factors affecting the company’s performance, and so that
employee views are fed back to management and taken into account
when decisions are made.
The company operates three all-employee share plans and through
these schemes, the Board encourages employees to become
shareholders and to participate in the Group’s employee share
ownership schemes, should they so wish. Savings-related share plans
covering most of the world give employees the opportunity to acquire
shares in the company by means of making regular savings. We currently
have around 55% of eligible employees participating. Further details on
our all-employee share plans and awards made under executive share
plans can be found in Note 25 on page 214 of the Financial Statements.
Political donations
During the year, the company and its subsidiaries did not make any
political donations or incur any expenditure, nor were any contemplated.
In keeping with previous practice, at the forthcoming AGM shareholders
will be asked in accordance with s366 and s376 of CA 2006 to approve,
on a precautionary basis, for the company and its subsidiaries to make
political donations and incur political expenditure for the period ending
31 December 2021.
Financial instruments and risk
The financial risk management objectives and policies of the Group are
set out in Note 15, page 197 of the Financial Statements. The Note sets
out information on the company’s policy for hedging each major type
of forecasted transactions for which hedge accounting is used, and our
exposure to currency, price risk, credit risk, liquidity risk and cash flow risk
in relation to the use of financial instruments.
Amendment to Articles of Association
The Articles of the company were adopted in 2012 and amended in 2015.
Any amendments to the Articles may be made in accordance with the
provisions of CA 2006 by special resolution of the shareholders.
The External Auditor, KPMG LLP (KPMG), has indicated its willingness
to continue in office and a resolution proposing the reappointment
of KPMG, and to authorise the Audit Committee to determine its
remuneration for the financial year ending 31 December 2021, will be
proposed at the forthcoming AGM. In accordance with s418(2) of CA
2006, each of the Directors holding office at the date of this report
confirm that:
• so far as the Director is aware, there is no relevant audit information
of which the company’s Auditor is unaware; and
• he or she has taken all reasonable steps to ascertain any relevant
audit information and to ensure that the company’s Auditor is aware
of that information.
Substantial shareholdings
As at 31 December 2020, pursuant to DTR 5 of the FCA’s Disclosure
Guidance and Transparency Rules and in accordance with s13(C) of
Schedule 7 of the Large and Medium-sized Companies and Groups
(Accounts and Reports) Regulations 2008 the company had received the
following notices of substantial interests (3% or more) in the total voting
rights of the company:
Date of last TR-1 Nature of % of voting
Holder notification interest rights
Massachusetts Financial
Services company 16 January 20131 Indirect 5.00
Morgan Stanley Investment
Management Limited 20 May 2020 Direct 5.04
1. Under a s.793 CA 2006 request, Massachusetts Financial Services company confirmed
on 8 January 2021 that its aggregate holding had increased. The voting percentage
was not disclosed
As at 15 March 2021, the company has not received any further
notifications under DTR 5 of the Disclosure Guidance and
Transparency Rules.
Application of the UK Corporate Governance Code 2018
We report against the requirements of the UK Corporate Governance
Code 2018 (the Code) issued by the Financial Reporting Council. Details
of how the company has applied the Code principles and provisions can
be found in the Corporate Governance Report on pages 102 to 112.
Annual General Meeting (AGM)
The forthcoming AGM of Reckitt Benckiser Group plc will be held on
28 May 2021 at 3.00pm at 103-105 Bath Road, Slough, Berkshire, SL1 3UH.
A separate Notice of Meeting, setting out the resolutions to be
proposed to shareholders, is available at www.reckitt.com. The Board
considers that each of the resolutions is in the best interests of the
company and the shareholders as a whole. The Directors unanimously
recommend that shareholders vote in favour of all the resolutions as they
intend to do so in respect of their own beneficial holdings.
By Order of the Board
Rupert Bondy
Company Secretary
Reckitt Benckiser Group plc
103-105 Bath Road
Slough, Berkshire SL1 3UH
Company registration number: 6270876
Legal Entity Identifier: 5493003JFSMOJG48V108
15 March 2021

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S TAT E M E N T O F D I R E C T O R S ’ R E S P O N S I B I L I T I E S
I N R E S P E C T O F T H E A N N U A L R E P O R T A N D T H E F I N A N C I A L S TAT E M E N T S

The Directors are responsible for preparing the Annual Report and the
Group and Parent Company Financial Statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare Group and
Parent Company Financial Statements for each financial year.
Under that law they are required to prepare the Group Financial
Statements in accordance with International Accounting Standards
in conformity with the requirements of the Companies Act 2006 and
applicable law and have elected to prepare the Parent Company
Financial Statements in accordance with UK accounting standards,
including FRS 102, ‘The Financial Reporting Standard applicable
in the UK and Republic of Ireland’. In addition, the Group Financial
Statements are required under the UK Disclosure Guidance and
Transparency Rules to be prepared in accordance with International
Financial Reporting Standards adopted pursuant to Regulation
(EC) No 1606/2002 as it applies in the European Union.
Under company law the Directors must not approve the Financial
Statements unless they are satisfied that they give a true and fair view of
the state of affairs of the Group and Parent Company and of their profit
or loss for that period. In preparing each of the Group and Parent
Company Financial Statements, the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable, relevant and
reliable;
• for the Group Financial Statements, state whether they have been
prepared in accordance with International Accounting Standards in
conformity with the requirements of the Companies Act 2006,
International Financial Reporting Standards adopted pursuant to
Regulation (EC) No 1606/2002 as it applies in the European Union, and
due to a requirement of the US SEC, state they have been prepared
in accordance with IFRSs as issued by the International Accounting
Standards Board (IASB);
• for the Parent Company Financial Statements, state whether
applicable UK accounting standards have been followed, subject to
any material departures disclosed and explained in the Parent
Company Financial Statements;
• assess the Group and Parent Company’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern;
and
• use the going concern basis of accounting unless they either intend
to liquidate the Group or the Parent Company or to cease operations,
or have no realistic alternative but to do so.
Under applicable law and regulations, the Directors are also responsible
for preparing a Strategic Report, Directors’ Report, Directors’
Remuneration Report and Corporate Governance Statement that
comply with that law and those regulations.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company’s website.
Legislation in the UK governing the preparation and dissemination of
Financial Statements may differ from legislation in other jurisdictions.
Responsibility statement of the Directors in respect of the annual
financial report
We confirm that to the best of our knowledge:
• the Financial Statements, prepared in accordance with the applicable
set of accounting standards, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Company and the
undertakings included in the consolidation taken as a whole; and
• the Annual Report and Financial Statements includes a fair review of
the development and performance of the business and the position
of the issuer and the undertakings included in the consolidation taken
as a whole, together with a description of the principal risks and
uncertainties that they face.
We consider the Annual Report and Financial Statements, taken as a
whole, is fair, balanced and understandable and provides the information
necessary for shareholders to assess the Group’s position and
performance, business model and strategy.
On behalf of the Board
Rupert Bondy
Company Secretary
Reckitt Benckiser Group plc
103-105 Bath Road
Slough, Berkshire SL1 3UH
15 March 2021

The Directors are responsible for keeping adequate accounting

records that are sufficient to show and explain the Parent Company’s
transactions and disclose with reasonable accuracy at any time
the financial position of the Parent Company and enable them to
ensure that its Financial Statements comply with the Companies
Act 2006. They are responsible for such internal control as they
determine is necessary to enable the preparation of Financial
Statements that are free from material misstatement, whether due
to fraud or error, and have general responsibility for taking such
steps as are reasonably open to them to safeguard the assets of the
Group and to prevent and detect fraud and other irregularities.

Reckitt Annual Report and Accounts 2020 161

 I N D E P E N D E N T AU D I TO R ’ S R E P O R T
TO T H E M E M B E RS O F R E C K I T T B E N C K I S E R G R O U P P LC

1 Our opinion is unmodified Basis for opinion

We have audited the Financial Statements of Reckitt Benckiser Group plc
(“the Company”) for the year ended 31 December 2020 which comprise
the Group Income Statement, Group Statement of Comprehensive
Income, Group Balance Sheet, Group Statement of Changes in Equity,
Group Cash Flow Statement, and the related Notes, including the
accounting policies in Note 1 to the Group Financial Statements, and the
Parent Company Balance Sheet, Parent Company Statement of Changes
in Equity and the related Notes, including the accounting policies in Note 1
to the Parent Company Financial Statements.
In our opinion:
• the Financial Statements give a true and fair view of the state of the
Group’s and of the Parent Company’s affairs as at 31 December
2020 and of the Group’s profit for the year then ended;
• the Group Financial Statements have been properly prepared in
accordance with international accounting standards in conformity
with the requirements of the Companies Act 2006;
• the Parent Company Financial Statements have been properly
prepared in accordance with UK accounting standards, including
FRS 102 The Financial Reporting Standard applicable in the UK and
Republic of Ireland; and
• the Financial Statements have been prepared in accordance with
the requirements of the Companies Act 2006 and, as regards the
Group Financial Statements, Article 4 of the IAS Regulation to the
extent applicable.
We conducted our audit in accordance with International Standards on
Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities are
described below. We believe that the audit evidence we have obtained
is a sufficient and appropriate basis for our opinion. Our audit opinion
and matters included in this report are consistent with our report to the
Audit Committee.
We were first appointed as auditor by the Shareholders on 3 May 2018.
The period of total uninterrupted engagement is for the three financial
years ended 31 December 2020. We have fulfilled our ethical
responsibilities under, and we remain independent of the Group in
accordance with, UK ethical requirements including the FRC Ethical
Standard as applied to listed public interest entities. No non-audit
services prohibited by that standard were provided.
Overview
Materiality: £150 million (2019: £150 million)
Group Financial 5.1% (2019: 4.8%) of Group profit before tax
Statements as normalised to exclude exceptional adjusting items
a whole as disclosed on page 78 and defined on page 77
Coverage 79% (2019: 81%) of Group Net Revenue
83% (2019: 87%) of total profits and losses that
made up Group profit before tax
87% (2019: 86%) of Group total assets

Additional opinion in relation to IFRS as issued by the IASB: Key audit matters vs 2019
As explained in Note 1 to the Group Financial Statements, the group, Recurring risks Recoverability of goodwill and indefinite
in addition to complying with its legal obligation to apply international life intangible assets relating to IFCN
accounting standards in accordance with the Companies Act, has
also applied IFRSs as issued by the International Accounting Standards Revenue recognition in relation to trade
Board (“IASB”). spend arrangements and associated
accruals
In our opinion the Group Financial Statements have been properly Provision for uncertain tax positions (UTPs)
prepared in accordance with IFRS as issued by the IASB.
Recoverability of the Parent Company’s
investment in the subsidiary
Event driven New: Contingent liabilities arising from the
amendment to the South Korea Humidifier
Sanitiser (HS) law

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2 Key audit matters: our assessment of risks of material misstatement

Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the Financial Statements and
include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us, including those which had the
greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement team.

We summarise below the key audit matters, in decreasing order of audit significance, in arriving at our audit opinion above, together with our key audit
procedures to address those matters and, as required for public interest entities, our results from those procedures. These matters were addressed,
and our results are based on procedures undertaken, in the context of, and solely for the purpose of, our audit of the Financial Statements as a whole,
and in forming our opinion thereon, and consequently are incidental to that opinion, and we do not provide a separate opinion on these matters.

The risk Our response

Recoverability of
goodwill and indefinite
life intangible assets
relating to IFCN
IFCN goodwill and indefinite
life intangible assets (£9,849
million; 2019: £10,913 million)
Impairment charge (£985
million; 2019: £5,037 million)
Refer to page 124 (Audit
Committee Report), Note 1
on page 180 (accounting
policy) and Note 9 on pages
190 to 193 (financial
disclosures).
Forecast-based valuation
The recoverability of goodwill and indefinite life
intangible assets relating to the Infant and Child Nutrition
(“IFCN”) cash generating unit (“CGU”) is assessed using
forecast financial information within a discounted cash
flow model (“the model”).
In the current year the Group recognised an impairment
charge to IFCN goodwill of £985m (2019: £5,037m),
reflecting increased uncertainty around the achievability
of cash flow forecasts as a result of the COVID-19
pandemic.
The model is highly sensitive to changes in key
assumptions, both in relation to forecast financial
performance; in particular, Net Revenue growth and
margin improvements; as well external factors such as
future growth of the category as a whole, discount rates
and terminal growth rates. These assumptions include,
but are not limited to, the duration of the COVID-19
pandemic, the resultant recession and the impact on
birth rates, the duration of disruption to cross border
trade between Hong Kong and mainland China and the
commercial success of new product launches, including
adult nutrition, and the expansion of specialty nutrition.
Our procedures included:
Sensitivity analysis: We considered the sensitivity
of the impairment charge to reasonable changes in
assumptions, identified changes to these assumptions
since previous forecasts, and focused our attention on
those assumptions we considered to be most sensitive,
judgemental or otherwise prone to management bias.
We applied sensitivities to the key assumptions identified
to assess the impact on the model.
Historical comparisons: We compared the actual
performance of IFCN since acquisition against previous
budgets and forecasts to assess the Group’s ability to
forecast accurately and considered its impact on the
Group’s evaluation of forecast growth. We critically
challenged the margin projections by reference to
those achieved historically, forecast volume growth and
forecast and realised savings from productivity initiatives.
We challenged the Group on the forecast commercial
success of new product launches, particularly in relation
to adult nutrition, and its ability to deliver forecast Net
Revenue growth by assessing the Group’s past
experience in bringing new or improved products
to market.

The recoverable amount of the IFCN CGU, and
consequently the impairment charge, is therefore subject
to a high degree of estimation uncertainty.
When conducting an impairment assessment, there may
be incentive for the Group to use assumptions that are
overly optimistic and which could result in no impairment
charge being recognised or the recognition of an
impairment charge that is materially understated.
Conversely, if assumptions are overly cautious, the
impairment charge may be overstated.
The effect of these matters is that, as part of our risk
assessment, we determined that the value in use of the
IFCN CGU has a high degree of estimation uncertainty
and there exists a reasonably possible set of changes
in key assumptions that would result in a material change
to the IFCN valuation and associated impairment charge
well in excess of our materiality for the Group Financial
Statements as a whole and possibly many times that
amount.
Benchmarking assumptions: We critically evaluated
differences between Net Revenue growth assumptions
within the model and external market data relating to
projected growth for the product category as a whole.
We critically challenged the Group on its assumptions
relating to the potential duration of the COVID-19
pandemic, the resultant recession and the impact on
birth rates and the duration of disruption to cross border
trade between Hong Kong and mainland China by
comparing it to external market data sources.
We benchmarked margin assumptions against industry
competitors, external market volume growth forecasts
and our assessment of the group’s ability to achieve
productivity savings. We also benchmarked the terminal
growth rate assumptions against long-term estimates of
inflation.

The Group Financial Statements (note 9) disclose the

sensitivity estimated by the Group.

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2 Key audit matters: our assessment of risks of material misstatement continued

The risk Our response

Recoverability of Personnel interviews: We compared judgements made
goodwill and indefinite centrally to direct discussion with country General
life intangible assets Managers and Finance Directors. We considered and
relating to IFCN (continued) challenged the Group’s assumptions with reference to
any alternative views provided in-country.

In relation to the strategic review of IFCN China

announced on 24 February 2021, we corroborated the
consistency of key assumptions used within the model to
papers presented to, and minutes taken at, meetings of
the Board.

Our valuation expertise: We independently derived a

reasonable range of appropriate discount rates with the
assistance of our valuation specialists, compared these
to those calculated by the Group and challenged
differences in assumptions between the calculations.
We benchmarked the recoverable amount of the IFCN
CGU using implied earnings multiples to comparative
companies, historic transactions within the industry
and stockbrokers’ reports with the assistance of our
valuation specialists.

Assessing transparency: We considered the adequacy

of the disclosures provided by Note 9 of the Group
Financial Statements in relation to relevant accounting
standards. We paid particular attention to transparency
of disclosure of the events and circumstances that led to
the recognition of the impairment charge, and assessed
that the sensitivity disclosures appropriately reflect
uncertainty inherent in the assessment of the
recoverable amount as well as reasonably plausible
changes in key assumptions.

We performed the tests above rather than seeking to

rely on any of the Group’s controls because detailed
testing is inherently the most effective means of
obtaining audit evidence in this area.

Our results:
We found the carrying value of goodwill and indefinite
life intangible assets relating to IFCN and the related
impairment charge to be acceptable (2019 result:
acceptable).

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2 Key audit matters: our assessment of risks of material misstatement continued
Revenue recognition in
relation to trade spend
arrangements and
associated accruals
Trade spend accruals (£1,275
million; 2019: £1,095 million)
Refer to page 124 (Audit
Committee Report), Note 1
on page 180 (accounting
policy) and Note 21 on page
208 (financial disclosures).
G OV E R N A N CE
The risk
Subjective estimate
The Group regularly enters into complex arrangements
providing pricing, placement and other promotional
rebates and allowances to its customers. These trade
spend arrangements can vary in complexity by market,
product category and customer.
Revenue is measured net of outflows arising from
such arrangements which, for agreements or practices
spanning a period end, requires an estimate of the
extent and value of future activity. In certain instances,
COVID-19 supply constraints have also impacted
customer service levels, which may result in settlements
through commercial negotiation. These estimates can be
subjective and require the use of assumptions that are
susceptible to management bias.
The impact of COVID-19 on the Group has increased the
risk of fraud and management bias. Higher than average
revenue growth globally has meant that most markets
have met or exceeded their targets and, therefore, this
could create an incentive to defer revenues into the next
financial year by overstating trade spend accruals. Whilst
the risk of a material misstatement in an individual market
is remote, there is a risk that unacceptably cautious
judgements in multiple markets may, in aggregate,
materially misstate the Group Financial Statements.
The effect of these matters is that, as part of our risk
assessment, we determined that trade spend accruals
carry a high degree of estimation uncertainty, with a
potential range of reasonable outcomes greater than our
materiality for the Group Financial Statements as a whole.
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F I N A N C I A L S TAT E M E N T S
Our response
Our procedures included:
Accounting policies: We critically assessed the
appropriateness of the Group’s accounting policies
relating to trade spend.
Historical comparisons: We evaluated the accuracy of
the Group’s more judgemental accruals by comparing
those recognised in the prior year to the actual trade
spend incurred.
Tests of detail: We focused our testing on those trade
spend accruals we considered to be more judgemental
or potentially subject to management bias and fraud. For
a sample of these trade spend accruals, we:
• reperformed the calculation to assess whether it was
mathematically accurate;
• identified the key assumptions in the calculation of
each accrual selected, such as forecast sales
volumes, rebate structure and settlement mechanism;
• agreed those key assumptions to relevant
documentation, such as invoices received after the
balance sheet date, customer agreements or
third-party consumption data; and
• assessed whether the key assumptions were
consistent with external data points and the Group’s
historic experience of comparable trade spend
arrangements.
Assessing transparency: We assessed the adequacy
of the Group’s disclosures in relation to the degree of
estimation involved in arriving at the trade spend
accruals and the amount of trade spend recognised
and deducted in determining Net Revenue.
We performed the tests above rather than seeking to
rely on any of the Group’s controls because detailed
testing is inherently the most effective means of
obtaining audit evidence in this area.
Our results:
We found the trade spend accruals recognised to be
acceptable (2019 result: acceptable).
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2 Key audit matters: our assessment of risks of material misstatement continued
The risk
Contingent liabilities arising Dispute outcome
from the amendment to
the South Korea Humidifier The Group is involved in ongoing litigation relating to the
Sanitiser (HS) law HS issue in South Korea. On 25 September 2020, an
amendment was enacted (the “HS law amendment”)
Refer to page 124 (Audit which significantly altered the legal framework under
Committee Report), Note 1 which HS claims were previously made and settled. As a
on page 183 (accounting result, and outside of those provisions relating to the
policy) and Note 20 on pages Group’s own compensation plan, provisions recognised
207 to 208 (financial under the HS law prior to the amendment are no longer
disclosures). recognised and judgement is needed to assess whether
the recognition criteria for a provision have been met
under the HS law amendment.
The Group must assess the likelihood and extent of
any future economic outflow arising from the HS law
amendment. The amounts involved are potentially
significant, and the application of accounting standards
to determine the amount, if any, to be provided for, is
inherently subjective.
The effect of these matters is that, as part of our risk
assessment, we determined that the contingent liabilities
arising from the HS law amendment have a high degree
of judgement, with a potential range of reasonable
outcomes greater than our materiality for the Group
Financial Statements as a whole.
166 Reckitt Annual Report and Accounts 2020
Our response
Our procedures included:
Enquiry of lawyers: We enquired of the Group’s internal
and external counsel to obtain an understanding of the
facts in relation to the HS law amendment.
We requested and received formal confirmations directly
from the Group’s external counsel that evaluated the
current status of legal proceedings, the probability of
economic outflow in relation to the law amendment, and
the ability to reliably estimate such economic outflow.
We also inquired of external legal counsel to evaluate
their basis for conclusion in their respective
confirmations.
Assessing transparency: We assessed the adequacy of
the Group’s disclosures of contingent liabilities related to
the HS law amendment, including disclosures about the
nature and extent of the exposure.
We performed the tests above rather than seeking to
rely on any of the Group’s controls because the nature of
the matter is such that we would expect to obtain audit
evidence primarily through the detailed procedures
described.
Our results:
We found the Group’s treatment of contingent liabilities
and related disclosures arising from the HS law
amendment to be acceptable and appropriate.
 S T R AT E G I C R E P O R T
2 Key audit matters: our assessment of risks of material misstatement continued
Provision for uncertain
tax positions (UTPs)
(£950 million; 2019: £891
million)
Refer to page 124 (Audit
Committee Report), Note 1
on page 180 (accounting
policy) and Note 22 on page
208 (financial disclosures).
G OV E R N A N CE
The risk
Subjective estimate
Due to the Group operating across a number of different
tax jurisdictions, and the complexities of transfer pricing
and other international tax legislation, it is subject to
periodic challenge by local tax authorities on a range of
tax matters arising in the normal course of business.
These challenges by the local tax authorities include but
are not limited to:
• transfer pricing arrangements relating to the Group’s
operating model;
• transfer pricing arrangements relating to the
ownership of intellectual property rights that are used
across the Group;
• deductibility of interest on intra-Group borrowings;
and
• the European Commission’s ongoing State Aid
investigations into transfer pricing ruling practices of
certain member states.
Provision for uncertain tax positions requires the
Directors to make judgements and estimates in relation
to tax issues and exposures where the Group may be
challenged by local tax authorities on its interpretation of
tax legislation. Auditor judgement is required to assess
whether the Directors’ overall estimate, taking into
account key assumptions such as the risk rating applied
to a certain jurisdiction and the percentage applied to
calculate the provision, falls within an acceptable range.
The effect of these matters is that, as part of our risk
assessment, we determined that the estimates of
uncertain tax positions have a high degree of estimation
uncertainty, with a potential range of reasonable
outcomes greater than our materiality for the Group
Financial Statements as a whole.
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F I N A N C I A L S TAT E M E N T S
Our response
Our procedures included:
Our tax expertise: We used our own international
and local tax specialists to assist us to:
• Inspect and assess the centrally prepared transfer
pricing policies to determine whether they reflect the
risks, activities and substance of each of the entities
within the supply chain; and
• Assess the Group’s tax positions, its correspondence
with the relevant tax authorities, and to analyse and
challenge the assumptions used to determine
provisions for tax uncertainties based on our
knowledge and experiences of the application
of the tax legislation.
Historical comparisons: We assessed the historical
accuracy of the provision level following any recent court
judgements and results of relevant tax authority audits
and considered the impact on the remaining provision.
Assessing transparency: We assessed the adequacy of
the Group’s disclosures in respect of uncertain tax
positions.
We performed the tests above rather than seeking to
rely on any of the Group’s controls because the nature of
the balance is such that we would expect to obtain audit
evidence primarily through the detailed procedures
described above.
Our results:
We found the level of uncertain tax provisioning to be
acceptable (2019 result: acceptable).
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2 Key audit matters: our assessment of risks of material misstatement continued

The risk Our response

Recoverability of the Low risk, high value Our procedures included:
Parent Company’s
investment in the The carrying amount of the Parent Company’s Tests of detail: We compared the carrying amount of
subsidiary investment in the subsidiary represents 99.6% (2019: the Company’s only direct investment with its draft
99.7%) of the Parent Company’s total assets. Its balance sheet to identify whether its net assets, being an
(£14,975 million, recoverability is not at a high risk of significant approximation of its minimum recoverable amount, was
2019: £14,963 million) misstatement or subject to significant judgement. in excess of its carrying amount and assessing whether
However, due to its materiality in the context of the this subsidiary has historically been profit-making.
Refer to page 222 Parent Company Financial Statements, this is considered
(accounting policy) and page to be the area that had the greatest effect on our overall Comparing valuations: We performed a reconciliation
223 (financial disclosures). Parent Company audit. of the carrying amount of the investment in subsidiary
to the market capitalisation as this subsidiary owns the
entire Group excluding its Parent.

We performed the tests above rather than seeking to

rely on any of the company’s controls because the nature
of the balance is such that we would expect to obtain
audit evidence primarily through the detailed procedures
described above.

Our results:
We found the Company’s conclusion that there is no
impairment of its investment in the subsidiary to be
acceptable (2019 result: acceptable).

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3 Our application of materiality and an overview of the scope Group profit before tax normalised Group materiality
of our audit £150 million
to exclude exceptional adjusting items
(2019: £150 million)
Materiality £2,934 million (2019: £3,133 million)
Materiality for the Group Financial Statements as a whole was set at £150 £150 million
million (2019: £150 million), determined with reference to a benchmark of Whole financial
Group profit before tax, normalised to exclude this year’s exceptional statements materiality
adjusting items of £1,061 million as disclosed on page 78 and defined on (2019: £150 million)
page 77 (2019: Group loss before tax, normalised to exclude exceptional
adjusting items of £5,240 million), of which it represents 5.1% (2019: 4.8%). £100 million
Range of materiality at
54 components
In determining the materiality benchmark, we had regard to institutional
(£8 million to £100 million)
investor commentary on the Group, and the process followed by those (2019: £7.5 million
current shareholders who also typically remove exceptional adjusting to £50 million)
items as they seek to derive a Group profit before tax to use as the basis
for investment appraisal.

Materiality for the Parent Company Financial Statements as a whole

was set at £75 million (2019: £75 million) determined with reference to
a benchmark of Parent Company total assets of £15,034 million (2019: Group profit before tax normalised
£15,011 million) of which it represents 0.5% (2019: 0.5%). to exclude exceptional adjusting items
£7.0 million
Group materiality Misstatements reported
In line with our audit methodology, our procedures on individual account to the Audit Committee
balances and disclosures were performed to a lower threshold, (2019: £7.5 million)
performance materiality, so as to reduce to an acceptable level the risk
that individually immaterial misstatements in individual account balances
add up to a material amount across the Financial Statements as a whole. Total profits and losses
Performance materiality for the Group was set at 75% (2019: 75%) of that made up Group profit
materiality for the Group Financial Statements as a whole, which equates before tax
Group Net Revenue
to £110 million (2019: £110 million). Performance materiality for the Parent
was set at 75% (2019: 75%) of materiality for the Parent Company 21% 17%
Financial Statements as a whole, which equates to £55 million (2019: £55
million). We applied these percentages in our determination of
1% 13%
performance materiality because we did not identify any factors 19%
1%

79% 83%
indicating an elevated level of risk. 2%

We agreed with the Audit Committee that we would report to the (2019: 81%) (2019: 87%)
committee any corrected or uncorrected identified misstatements 79% 86%
exceeding £7.0 million (2019: £7.5 million) in addition to other identified
misstatements that warranted, in our view, reporting on qualitative
grounds. We also report to the Audit Committee on disclosure matters 79%
82%
that are identified when assessing the overall presentation of the
Financial Statements.
Group total assets
Scope 13%
The Group operates in more than 60 countries across six continents with
1%
the largest markets being in the US and China. From 1 July 2020 the Group
has been organised into three Global Business Units being Hygiene, Health 14%

87%
and Nutrition (previously two – Health and Hygiene Home). 1%

We scoped the audit by obtaining an understanding of the Group and (2019: 86%)
its environment and assessing the risk of material misstatement at the 85%
Group and component level. We have considered components on
the basis of their contribution to Group Net Revenue, total profits and
losses that made up Group profit before tax and Group total assets.
Of the Group’s 429 (2019: 388) reporting components, as instructed 86%

by us, component teams in 21 countries (2019: 22 countries) subjected

Key:
53 (2019: 44) to full scope audits for Group purposes, none (2019:
Full scope for Group audit Full scope for Group audit
10) to specified risk-focused audit procedures and 1 (2019: none) to purposes 2020 purposes 2019
an audit of account balance over inventory, cost of sales, property,
plant and equipment, trade payables and cash. The component for Audit of account balances 2020 Specified risk-focused
procedures 2019
which we performed work other than an audit for Group reporting
purposes was not individually significant but was included in the Residual components 2020 Residual components 2019
scope of our Group reporting work in order to provide further
coverage over the Group’s results. The components within the scope
of our work accounted for the percentages illustrated opposite.

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3 Our application of materiality and an overview of the scope
of our audit continued
The Group team performed procedures on the items excluded from
normalised Group profit before tax, performed testing of IT systems and
also work over the consolidation of financial information.
The remaining 21% (2019: 19%) of Group Net Revenue, 17% (2019: 13%) of
total profits and losses that made up Group profit before tax and 13%
(2019: 14%) of Group total assets is represented by a number of other
reporting components, none of which individually represented more
than 3% (2019: 2%) of any of Group Net Revenue, total profits and losses
that made up Group profit before tax or Group total assets. For these
residual 375 (2019: 334) components, we performed analysis at an
aggregated Group level and performed unpredictable procedures to
re-examine our assessment that no significant risks of material
misstatement exist in those components.
Team Structure
The Group audit team is required to instruct the component teams about
their responsibilities in relation to the consolidated Group audit and to
understand the approach taken by component auditors to meet these
responsibilities. The Group audit team is also required to understand the
conclusions reached by component auditors and to review and challenge
the work they have performed to reach these conclusions.
Due to the travel restrictions imposed as a result of COVID-19, the Group
audit team did not visit any overseas components (2019: 50 components
in 19 countries). A virtual communication and oversight strategy was
implemented instead between the Group audit team and component
auditors. This included:
• A virtual global planning conference led by the Group audit team to
discuss key audit risks and obtain input from component auditors;
• Instructions issued by the Group audit team to component auditors
setting out the significant areas to be covered, including the relevant
key audit matters identified above and the information to be
reported back to the Group audit team;
• Approval by the Group audit team of the component materiality for
all components, which ranged from £8 million to £100 million (2019:
£7.5 million to £50 million), having regard to the mix of size and risk
profile of the Group across the components, including considering
the benchmark for each component;
• Attendance by the Group audit team and relevant component
auditors at management’s balance sheet reviews for all in-scope
component locations and by the Group audit team at 2 out-of-scope
component locations, the latter to incorporate an element of
unpredictability into our audit;
• Risk assessment and challenge sessions with each component audit
team led by a senior member of the Group audit team;
• Attendance by the Group audit team and relevant component
auditors at year end clearance meetings where the findings reported
to the Group audit team were discussed in more detail and any
further work required by the Group audit team was then performed
by the component auditors; and
• Review of key working papers within component audit files (using
remote technology capabilities) to understand and challenge the audit
approach and audit findings of each component audit. As we were
unable to visit 4 components in China, where remote access to audit
documentation is prohibited, we instead extended our oversight of
those component teams through extended video conference
discussions to understand the conclusions reached and to review and
challenge the work they have performed to reach conclusions.
The work on 52 of the 54 components (2019: 51 of the 54 components)
was performed by component auditors and the rest, including the audit
of the Parent Company, was performed by the Group team.
170 Reckitt Annual Report and Accounts 2020
4 We have nothing to report on going concern
The Directors have prepared the Financial Statements on the going
concern basis as they do not intend to liquidate the Group or the Parent
Company or to cease their operations, and as they have concluded that
the Group’s and the Parent Company’s financial position means that
this is realistic. They have also concluded that there are no material
uncertainties that could have cast significant doubt over their ability to
continue as a going concern for at least a year from the date of approval
of the Financial Statements (“the going concern period”).
We used our knowledge of the Group, its industry, and the general
economic environment to identify the inherent risks to its business
model and analysed how those risks might affect the Group’s and Parent
Company’s financial resources or ability to continue operations over the
going concern period. The risks that we considered most likely to
adversely affect the Group’s and Parent Company’s available financial
resources and metrics relevant to debt covenants over this period were:
• In relation to the COVID-19 pandemic, disruption at a number of the
Group’s key production facilities, the viability of key suppliers and
customers, and the impact of consumer demand for the Group’s
brands;
• A significant product safety issue leading to reputational damage
with customers, consumers or regulators; and
• The impact of a significant business continuity issue, outside of those
risks presented by the COVID-19 pandemic, affecting the Group’s
manufacturing facilities or those of its suppliers.
We considered whether these risks could plausibly affect the liquidity or
covenant compliance in the going concern period by comparing severe,
but plausible downside scenarios that could arise from these risks
individually and collectively against the level of available financial
resources and covenants indicated by the Group’s financial forecasts.
Our procedures also included an assessment of whether the going
concern disclosure in note 1 to the Financial Statements gives a complete
and accurate description of the Directors’ assessment of going concern.
Our conclusions based on this work:
• we consider that the Directors’ use of the going concern basis of
accounting in the preparation of the Financial Statements is
appropriate;
• we have not identified, and concur with the Directors’ assessment
that there is not, a material uncertainty related to events or conditions
that, individually or collectively, may cast significant doubt on the
Group’s or Parent Company’s ability to continue as a going concern
for the going concern period;
• we have nothing material to add or draw attention to in relation to
the Directors’ statement in note 1 to the Financial Statements on the
use of the going concern basis of accounting with no material
uncertainties that may cast significant doubt over the Group and
Parent Company’s use of that basis for the going concern period, and
we found the going concern disclosure in note 1 to be acceptable;
and
• the related statement under the Listing Rules set out on page 161 is
materially consistent with the Financial Statements and our audit
knowledge.
However, as we cannot predict all future events or conditions and as
subsequent events may result in outcomes that are inconsistent with
judgements that were reasonable at the time they were made, the
above conclusions are not a guarantee that the Group or the Parent
Company will continue in operation.
 S T R AT E G I C R E P O R T G OV E R N A N CE
5 Fraud and breaches of laws and regulations – ability to detect
Identifying and responding to risks of material misstatement
due to fraud
To identify risks of material misstatement due to fraud (“fraud risks”)
we assessed events or conditions that could indicate an incentive or
pressure to commit fraud or provide an opportunity to commit fraud.
Our risk assessment procedures included:
• Enquiry of Directors, operational managers, the General Counsel, the
Chief Ethics and Compliance Officer and members of the Internal
Audit function as well as inspection of minutes of meetings of the
Board, Audit Committee, Group Executive Committee and CRSEC
Committee. Inspection of the Group’s policies and procedures to
prevent, detect and respond to the risks of fraud, Internal Audit
reports issued during the year, reports to the Group’s whistleblowing
hotline and the response to those reports;
• Consideration of the Group’s results against performance targets and
the Group’s remuneration policies, key drivers for remuneration and
bonus levels;
• Consultation with our own forensic specialists to assist us in
identifying fraud risks based on their experience of comparable
businesses, similar sectors; as well as of the geographies in which the
Group operates. The forensic specialists participated in the initial
fraud risk assessment discussions and were consulted throughout the
audit when further guidance was deemed necessary.
We communicated identified fraud risks throughout the audit team and
remained alert to any indications of fraud throughout the audit. This
included communication from the Group to component audit teams of
relevant fraud risks identified at the Group level and request to all
component audit teams to report to the Group audit team any instances
of fraud that could give rise to a material misstatement at Group.
As required by auditing standards, and after considering the impact of
the Group’s results against performance targets, we perform procedures
to address the risk of management override of controls and the risk of
fraudulent revenue recognition. We assessed that there is an inherent
risk that Group and component management may be in a position to
make inappropriate accounting entries, and of risk of bias in accounting
estimates and judgements. We determined that these risks would most
likely manifest themselves in two key areas being:
• Trade spend accruals may be overstated in order to defer Net
Revenue and profit into the 2021 financial year; and
• Management bias in the recoverability of goodwill and indefinite life
intangible assets relating to IFCN arising from external pressure to
demonstrate improved business performance and the potential
impact on the strategic review of IFCN China.
Further detail in respect of both matters is set out in the key audit matter
disclosures in section 2 of this report.
We performed procedures including:
• Identifying journal entries to test based on risk criteria and comparing
the identified entries to supporting documentation. These included
unusual journal entries associated with trade spend.
• Assessing significant accounting estimates for bias.
Reckitt Annual Report and Accounts 2020
F I N A N C I A L S TAT E M E N T S
Identifying and responding to risks of material misstatement due to
non-compliance with laws and regulations
We identified areas of laws and regulations that could reasonably be
expected to have a material effect on the Financial Statements from our
general commercial and sector experience, through discussion with the
Directors and other management (as required by auditing standards),
and from inspection of the Group’s regulatory and legal correspondence
and inspection of the policies and procedures regarding compliance
with laws and regulations.
We communicated identified laws and regulations risks throughout
our team and remained alert to any indications of non-compliance
throughout the audit. This included communication from the Group to
all component audit teams of relevant laws and regulations identified
at the Group level, and a request for component auditors to report to
the Group audit team any instances of non-compliance with laws and
regulations that could give rise to a material misstatement at Group.
The potential effect of these laws and regulations on the Financial
Statements varies considerably.
Firstly, the Group is subject to laws and regulations that directly affect
the Financial Statements including financial reporting legislation
(including related companies’ legislation), distributable profits legislation,
and taxation legislation (direct and indirect). We assessed the extent of
compliance with these laws and regulations as part of our procedures on
the related Financial Statement items.
Secondly, the Group is subject to many other laws and regulations where
the consequences of non-compliance could have a material effect on
amounts or disclosures in the Financial Statements, for instance through
the imposition of fines or litigation or the loss of the Group’s permission
to operate in countries where the non-adherence to laws could prevent
trading in such countries. We identified the following areas as those
most likely to have such an effect:
• Employee health and safety, reflecting the nature of the Group’s
production and distribution process;
• Anti-bribery and corruption laws, reflecting that the Group operates
in a number of countries where there is opportunity to engage in
bribery given more limited regulation;
• Interaction with healthcare professionals, reflecting the nature of the
Group’s products in the Health and Nutrition Global Business Units;
• Global competition laws, reflecting the nature of the Group’s business
and certain market share positions;
• Consumer product law such as product safety, quality standards and
product claims, reflecting the nature of the Group’s diverse product
base;
• Data privacy laws, reflecting the Group’s growing amounts of
personal data held; and
• Intellectual property legislation, reflecting the potential of the Group
to infringe trademarks, copyright and patents.
Auditing standards limit the required audit procedures to identify
non-compliance with these laws and regulations to enquiry of the
Directors and other management and inspection of regulatory and legal
correspondence, if any. Therefore, if a breach of operational regulations
is not disclosed to us or evident from relevant correspondence, an audit
will not detect that breach.
Further detail in respect of consumer product law in South Korea is set
out in the key audit matter disclosures in section 2 of this report. For
the South Korea Humidifier Sanitiser matter discussed in note 20 we
assessed disclosures against our understanding from enquiries of the
Group’s internal and external counsel and legal confirmations obtained
from the Group’s external counsel.
171
 I N D E P E N D E N T AU D I TO R ’ S R E P O R T
TO T H E M E M B E RS O F R E C K I T T B E N C K I S E R G R O U P P LC
CO NT I N U ED
5 Fraud and breaches of laws and regulations – ability to detect
continued
Context of the ability of the audit to detect fraud or breaches of law
or regulation
Owing to the inherent limitations of an audit, there is an unavoidable
risk that we may not have detected some material misstatements in
the Financial Statements, even though we have properly planned and
performed our audit in accordance with auditing standards. For example,
the further removed non-compliance with laws and regulations is from
the events and transactions reflected in the Financial Statements, the
less likely the inherently limited procedures required by auditing
standards would identify it.
In addition, as with any audit, there remained a higher risk of non-
detection of fraud, as these may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal controls. Our
audit procedures are designed to detect material misstatement. We are
not responsible for preventing non-compliance or fraud and cannot be
expected to detect non-compliance with all laws and regulations.
6 We have nothing to report on the other information in the Annual
Report
The Directors are responsible for the other information presented in the
Annual Report together with the Financial Statements. Our opinion on
the Financial Statements does not cover the other information and,
accordingly, we do not express an audit opinion or, except as explicitly
stated below, any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so,
consider whether, based on our Financial Statements audit work, the
information therein is materially misstated or inconsistent with the
Financial Statements or our audit knowledge.
Based solely on that work we have not identified material misstatements
in the other information.
Strategic report and Directors’ report
Based solely on our work on the other information:
• we have not identified material misstatements in the strategic report
and the Directors’ report;
• in our opinion the information given in those reports for the financial
year is consistent with the Financial Statements; and
• in our opinion those reports have been prepared in accordance with
the Companies Act 2006.
Directors’ remuneration report
In our opinion the part of the Directors’ Remuneration Report to be
audited has been properly prepared in accordance with the Companies
Act 2006.
Disclosures of emerging and principal risks and longer-term viability
We are required to perform procedures to identify whether there is a
material inconsistency between the Directors’ disclosures in respect of
emerging and principal risks and the viability statement, and the Financial
Statements and our audit knowledge.
172 Reckitt Annual Report and Accounts 2020
Based on those procedures, we have nothing material to add or draw
attention to in relation to:
• the Directors’ confirmation within the Viability Statement page 93
that they have carried out a robust assessment of the emerging and
principal risks facing the Group, including those that would threaten
its business model, future performance, solvency and liquidity;
• the principal and emerging risk disclosures describing these risks and
how emerging risks are identified, and explaining how they are being
managed and mitigated; and
• the Directors’ explanation in the Viability Statement of how they have
assessed the prospects of the Group, over what period they have
done so and why they considered that period to be appropriate, and
their statement as to whether they have a reasonable expectation
that the Group will be able to continue in operation and meet its
liabilities as they fall due over the period of their assessment,
including any related disclosures drawing attention to any necessary
qualifications or assumptions.
We are also required to review the Viability Statement, set out on page
93, under the Listing Rules. Based on the above procedures, we have
concluded that the above disclosures are materially consistent with the
Financial Statements and our audit knowledge.
Our work is limited to assessing these matters in the context of only
the knowledge acquired during our Financial Statements audit. As we
cannot predict all future events or conditions and as subsequent events
may result in outcomes that are inconsistent with judgements that were
reasonable at the time they were made, the absence of anything to
report on these statements is not a guarantee as to the Group’s and
Parent Company’s longer-term viability. For example, the longer-term
impact of COVID-19 in the key markets in which the Group operates,
its customers, consumers and the wider economy is unclear.
Corporate governance disclosures
We are required to perform procedures to identify whether there is a
material inconsistency between the Directors’ corporate governance
disclosures, the Financial Statements and our audit knowledge.
Based on those procedures, we have concluded that each of the
following is materially consistent with the Financial Statements and our
audit knowledge:
• the Directors’ statement that they consider that the Annual Report
and Financial Statements taken as a whole is fair, balanced and
understandable, and provides the information necessary for
shareholders to assess the Group’s position and performance,
business model and strategy;
• the section of the Annual Report describing the work of the Audit
Committee, including the significant issues that the Audit Committee
considered in relation to the Financial Statements, and how these
issues were addressed; and
• the section of the Annual Report that describes the review of the
effectiveness of the Group’s risk management and internal control
systems.
We are also required to review the part of Corporate Governance
Statement relating to the Group’s compliance with the provisions of
the UK Corporate Governance Code specified by the Listing Rules for
our review.
We have nothing to report in this respect.
 S T R AT E G I C R E P O R T G OV E R N A N CE F I N A N C I A L S TAT E M E N T S

7 We have nothing to report on the other matters on which we are
required to report by exception
Under the Companies Act 2006, we are required to report to you if,
in our opinion:
• adequate accounting records have not been kept by the Parent
Company, or returns adequate for our audit have not been received
from branches not visited by us; or
• the Parent Company Financial Statements and the part of the
Directors’ Remuneration Report to be audited are not in agreement
with the accounting records and returns; or
• certain disclosures of Directors’ remuneration specified by law are
not made; or
• we have not received all the information and explanations we require
for our audit.
9 The purpose of our audit work and to whom we owe our
responsibilities
This report is made solely to the Company’s members, as a body, in
accordance with Chapter 3 of Part 16 of the Companies Act 2006
and the terms of our engagement by the company. Our audit work
has been undertaken so that we might state to the Company’s
members those matters we are required to state to them in an
auditor’s report, and the further matters we are required to state
to them in accordance with the terms agreed with the Company,
and for no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than
the Company and the Company’s members, as a body, for our
audit work, for this report, or for the opinions we have formed.

We have nothing to report in these respects. Richard Broadbelt (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
8 Respective responsibilities Chartered Accountants
Directors’ responsibilities 15 Canada Square
As explained more fully in their statement set out on page 161, the London
directors are responsible for: the preparation of the Financial Statements E14 5GL
including being satisfied that they give a true and fair view; such internal
control as they determine is necessary to enable the preparation of 15 March 2021
Financial Statements that are free from material misstatement, whether
due to fraud or error; assessing the Group and Parent Company’s ability
to continue as a going concern, disclosing, as applicable, matters related
to going concern; and using the going concern basis of accounting
unless they either intend to liquidate the Group or the Parent Company
or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about whether
the Financial Statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue our
opinion in an auditor’s report. Reasonable assurance is a high level
of assurance, but does not guarantee that an audit conducted
in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud
or error and are considered material if, individually or in aggregate,
they could reasonably be expected to influence the economic
decisions of users taken on the basis of the Financial Statements.

A fuller description of our responsibilities is provided on the FRC’s

website at www.frc.org.uk/auditorsresponsibilities.

Reckitt Annual Report and Accounts 2020 173

 G R O U P I N C O M E S TAT E M E N T

2020 2019
For the year ended 31 December Note £m £m

CONTINUING OPERATIONS
Net Revenue 2 13,993 12,846
Cost of sales (5,558) (5,068)
Gross profit 8,435 7,778
Net operating expenses 3 (5,290) (4,616)
Impairment of goodwill and other intangible assets 9 (985) (5,116)
Operating profit/(loss) 2 2,160 (1,954)
Finance income 6 77 161
Finance expense 6 (363) (314)
Net finance expense (286) (153)
Share of loss of equity-accounted investees, net of tax (1) –
Profit/(loss) before income tax 1,873 (2,107)
Income tax expense 7 (720) (665)
Net income/(loss) from continuing operations 1,153 (2,772)
Net income /(loss) from discontinued operations 29 50 (898)
Net income/(loss) 1,203 (3,670)
Attributable to non-controlling interests 16 13
Attributable to owners of the parent company 1,187 (3,683)
Net income/(loss) 1,203 (3,670)
Basic earnings/(loss) per ordinary share
From continuing operations (pence) 8 160.0 (393.0)
From discontinued operations (pence) 8 7.0 (126.7)
From total operations (pence) 8 167.0 (519.7)
Diluted earnings/(loss) per ordinary share
From continuing operations (pence) 8 159.3 (393.0)
From discontinued operations (pence) 8 7.0 (126.7)
From total operations (pence) 8 166.3 (519.7)

174 Reckitt Annual Report and Accounts 2020

 S T R AT E G I C R E P O R T G OV E R N A N CE F I N A N C I A L S TAT E M E N T S

G R O U P S TAT E M E N T O F C O M P R E H E N S I V E I N C O M E

2020 2019
For the year ended 31 December Note £m £m

Net income/(loss) 1,203 (3,670)

Other comprehensive income/(expense)
Items that may be reclassified to Income Statement in subsequent years
Net exchange losses on foreign currency translation, net of tax 7 (207) (579)
(Losses)/gains on net investment hedges, net of tax 7 (75) 70
Losses on cash flow hedges, net of tax 7 (17) (9)
(299) (518)
Items that will not be reclassified to Income Statement in subsequent years
Remeasurements of defined benefit pension plans, net of tax 7 (60) 14
Revaluation of equity instruments – FVOCI 7 19 (13)
(41) 1
Other comprehensive (expense), net of tax (340) (517)
Total comprehensive income/(expense) 863 (4,187)
Attributable to non-controlling interests 16 12
Attributable to owners of the parent company 847 (4,199)
Total comprehensive income/(expense) 863 (4,187)
Total comprehensive income/(expense) attributable to owners of the parent company arising from:
Continuing operations 797 (3,301)
Discontinued operations 50 (898)
847 (4,199)

Reckitt Annual Report and Accounts 2020 175

 GROUP BALANCE SHEET

2020 2019
As at 31 December Note £m £m

ASSETS
Non-current assets
Goodwill and other intangible assets 9 22,979 24,261
Property, plant and equipment 10 2,233 2,140
Equity instruments 11,15 136 58
Deferred tax assets 12 258 224
Retirement benefit surplus 23 226 268
Other non-current receivables 14 146 155
Total non-current assets 25,978 27,106
Current assets
Inventories 13 1,592 1,314
Trade and other receivables 14 1,921 2,079
Derivative financial instruments 15 30 30
Current tax recoverable 125 61
Cash and cash equivalents 16 1,646 1,549
Total current assets 5,314 5,033
Total assets 31,292 32,139
LIABILITIES
Current liabilities
Short-term borrowings 17 (763) (3,650)
Provisions for liabilities and charges 18 (243) (178)
Trade and other payables 21 (5,742) (4,820)
Derivative financial instruments 15 (118) (138)
Current tax liabilities 22 (72) (145)
Total current liabilities (6,938) (8,931)
Non-current liabilities
Long-term borrowings 17 (9,794) (8,545)
Deferred tax liabilities 12 (3,562) (3,513)
Retirement benefit obligations 23 (372) (351)
Provisions for liabilities and charges 18 (49) (56)
Non-current tax liabilities 22 (1,021) (969)
Other non-current liabilities 21 (397) (367)
Total non-current liabilities (15,195) (13,801)
Total liabilities (22,133) (22,732)
Net assets 9,159 9,407
EQUITY
Capital and reserves
Share capital 24 74 74
Share premium 252 245
Merger reserve (14,229) (14,229)
Other reserves 26 (379) (80)
Retained earnings 23,397 23,353
Attributable to owners of the parent company 9,115 9,363
Attributable to non-controlling interests 44 44
Total equity 9,159 9,407

The Financial Statements on pages 174 to 218 were approved by the Board of Directors and signed on its behalf on 15 March 2021 by:

Christopher Sinclair Laxman Narasimhan

Director Director
Reckitt Benckiser Group plc Reckitt Benckiser Group plc

176 Reckitt Annual Report and Accounts 2020

 S T R AT E G I C R E P O R T G OV E R N A N CE F I N A N C I A L S TAT E M E N T S

G R O U P S TAT E M E N T O F C H A N G E S I N E Q U I T Y

Total
attributable
to owners of Non-
Share Share Merger Other Retained the parent controlling Total
capital premium reserves1 reserves2 earnings company interests equity
Notes £m £m £m £m £m £m £m £m

Balance at 1 January 2019 74 245 (14,229) 437 28,197 14,724 47 14,771

Comprehensive income
Net (loss)/income – – – – (3,683) (3,683) 13 (3,670)
Other comprehensive
(expense)/income – – – (517) 1 (516) (1) (517)
Total comprehensive
(expense)/income – – – (517) (3,682) (4,199) 12 (4,187)
Transactions with owners
Treasury shares reissued 24 – – – – 61 61 – 61
Share-based payments 25 – – – – 18 18 – 18
Current tax on share awards 7 – – – – 4 4 – 4
Cash dividends 28 – – – – (1,227) (1,227) (15) (1,242)
Transactions with
non-controlling interests – – – – (18) (18) – (18)
Total transactions with owners – – – – (1,162) (1,162) (15) (1,177)
Balance at 31 December 2019 74 245 (14,229) (80) 23,353 9,363 44 9,407
Comprehensive income
Net income – – – – 1,187 1,187 16 1,203
Other comprehensive
(expense)/income – – – (299) (41) (340) – (340)
Total comprehensive
(expense)/income – – – (299) 1,146 847 16 863
Transactions with owners
Treasury shares reissued 24 – 7 – – 124 131 – 131
Share-based payments 25 – – – – 15 15 – 15
Purchase of ordinary shares by
employee share ownership trust – – – – (4) (4) – (4)
Tax on share awards 7 – – – – 4 4 – 4
Cash dividends 28 – – – – (1,241) (1,241) (16) (1,257)
Total transactions with owners – 7 – – (1,102) (1,095) (16) (1,111)
Balance at 31 December 2020 74 252 (14,229) (379) 23,397 9,115 44 9,159

1. The merger reserve relates to the 1999 combination of Reckitt & Colman plc and Benckiser N.V. and a Group reconstruction in 2007 treated as a merger under Part 27 of the
Companies Act 2006
2. Refer to Note 26 for an explanation of other reserves

Reckitt Annual Report and Accounts 2020 177

 G R O U P C A S H F L O W S TAT E M E N T

2020 2019
For the year ended 31 December Note £m £m

CASH FLOWS FROM OPERATING ACTIVITIES

Operating profit/(loss) from continuing operations 2,160 (1,954)
Losses/(gains) on sale of property, plant and equipment and intangible assets 3 (4)
Depreciation, amortisation and impairment 1,457 5,554
Share-based payments 15 18
Increase in inventories (317) (87)
Decrease/(increase) in trade and other receivables 94 (150)
Increase in payables and provisions 1,145 31
Cash generated from continuing operations 4,557 3,408
Interest paid (323) (371)
Interest received 56 161
Tax paid (762) (647)
Net cash flows attributable to discontinued operations 29 (10) (1,140)
Net cash generated from operating activities 3,518 1,411
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment (394) (306)
Purchase of intangible assets (92) (137)
Proceeds from the sale of property, plant and equipment 10 37
Acquisition of businesses, net of cash acquired – (18)
Purchase of equity instruments and convertible notes (36) (18)
Net cash used in investing activities (512) (442)
CASH FLOWS FROM FINANCING ACTIVITIES
Treasury shares reissued 24 131 61
Purchase of ordinary shares by employee share ownership trust (4) –
Proceeds from borrowings 17 2,903 1,548
Repayment of borrowings 17 (4,583) (1,122)
Dividends paid to owners of the parent company 28 (1,241) (1,227)
Dividends paid to non-controlling interests (16) (15)
Other financing activities (47) (75)
Net cash used in financing activities (2,857) (830)
Net increase in cash and cash equivalents 149 139
Cash and cash equivalents at beginning of the year 1,547 1,477
Exchange losses (52) (69)
Cash and cash equivalents at end of the year 1,644 1,547
Cash and cash equivalents comprise:
Cash and cash equivalents 16 1,646 1,549
Overdrafts 17 (2) (2)
1,644 1,547

178 Reckitt Annual Report and Accounts 2020

 S T R AT E G I C R E P O R T G OV E R N A N CE
N O T E S T O T H E F I N A N C I A L S TAT E M E N T S
1 Accounting Policies
The principal accounting policies adopted in the preparation of these
Financial Statements are set out below. Unless otherwise stated, these
policies have been consistently applied to all the years presented.
Basis of Preparation
These Financial Statements have been prepared in accordance with
International Accounting Standards in conformity with the requirements of
the Companies Act 2006. The Financial Statements are in compliance with
International Financial Reporting Standards as issued by the International
Accounting Standards Board (IASB) and as adopted pursuant to Regulation
(EC) No 1606/2002 as it applies in the European Union.
These Financial Statements have been prepared under the historical
cost convention, as modified by the revaluation of certain financial
assets and liabilities (including derivative instruments) at fair value
through profit or loss or other comprehensive income. A summary of the
Group’s accounting policies is set out below. Historical cost is generally
based on the fair value of the consideration given in exchange for goods
and services.
The preparation of Financial Statements that conform to IFRS requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities at the Balance Sheet date
and revenue and expenses during the reporting period. Although
these estimates are based on management’s best knowledge at the
time, actual amounts may ultimately differ from those estimates.
New Standards, Amendments and Interpretations
The following amended standards and interpretations were adopted
by the Group on 1 January 2020. These amended standards and
interpretations have not had a significant impact on the Group Financial
Statements.
• Amendments to References to Conceptual Framework in IFRS
Standards.
• Definition of a Business (Amendments to IFRS 3).
• Definition of Material (Amendments to IAS 1 and IAS 8).
• Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39
and IFRS 7).
A number of new standards are effective for annual periods beginning
on or after 1 January 2021 and earlier application is permitted; however,
the Group has not early adopted the new or amended standards in
preparing these consolidated Financial Statements.
• Interest Rate Benchmark Reform – Phase 2 (Amendments to IFRS 9,
IAS 39, IFRS 7, IFRS 4 and IFRS 16).
• Onerous Contracts – Cost of Fulfilling a Contract (Amendments to
IAS 37).
• Property, Plant and Equipment: Proceeds before Intended Use
(Amendments to IAS 16).
• Classification of Liabilities as Current or Non-current (Amendments
to IAS 1).
Going Concern
Having assessed the principal risks and other matters discussed in
connection with the Viability Statement, the Directors considered it
appropriate to adopt the going concern basis of accounting in preparing
the consolidated Financial Statements. When reaching this conclusion, the
Directors took into account the Group’s overall financial position and
exposure to principal risks, including the ongoing impact of COVID-19 and
future business forecasts. At 31 December 2020, the Group had cash and
cash equivalents of £1.6 billion. The Group also had access to committed
borrowing facilities of £5.5 billion. These facilities were undrawn at
period-end and are not subject to renewal until 2022 onwards. Further
detail is contained in the Strategic Report on pages 1 to 93.
Reckitt Annual Report and Accounts 2020
F I N A N C I A L S TAT E M E N T S
Basis of Consolidation
The consolidated Financial Statements include the results of Reckitt
Benckiser Group plc, a company registered in the UK, and all its subsidiary
undertakings made up to the same accounting date. Subsidiary
undertakings are those entities controlled by Reckitt Benckiser Group
plc. Control exists where the Group is exposed to, or has the rights to
variable returns from its involvement with, the investee and has the
ability to use its power over the investee to affect its returns.
Intercompany transactions, balances and unrealised gains on transactions
between Group companies have been eliminated on consolidation.
Unrealised losses have also been eliminated to the extent that they do
not represent an impairment of a transferred asset. The accounting
policies of subsidiaries have been changed where necessary to ensure
consistency with accounting policies adopted by the Group.
Foreign Currency Translation
Items included in the Financial Statements of each of the Group’s entities
are measured using the currency of the primary economic environment
in which the entity operates (the functional currency). The consolidated
Financial Statements are presented in Sterling, which is the Group’s
presentational currency.
Foreign currency transactions are translated into the functional currency
using exchange rates prevailing at the dates of the transactions. Foreign
exchange gains and losses resulting from the settlement of foreign
currency transactions and from the translation of foreign currency
denominated monetary assets and liabilities are recognised in the
Income Statement, except where hedge accounting is applied.
The Financial Statements of subsidiary undertakings with a non-Sterling
functional currency are translated into Sterling on the following basis:
• Assets and liabilities, at the rate of exchange ruling at the year-
end date.
• Income Statement items, at the average rate of exchange for
the year.
Exchange differences arising from the translation of the net investment
in subsidiary undertakings with a non-Sterling functional currency, and of
borrowings and other currency instruments designated as hedges of
such investments, are recorded in equity on consolidation.
Business Combinations
The acquisition method is used to account for the acquisition of
subsidiaries and businesses. Identifiable net assets acquired (including
intangible assets) in a business combination are measured initially at
their fair values at the acquisition date.
Where the measurement of the fair value of identifiable net assets
acquired is incomplete at the end of the reporting period in which the
combination occurs, the Group will report provisional fair values. Final
fair values are determined within a year of the acquisition date and
retrospectively applied.
The excess of the consideration transferred and the amount of any
non-controlling interest over the fair value of the identifiable assets
(including intangibles), liabilities and contingent liabilities acquired is
recorded as goodwill.
The consideration transferred is measured at the fair value of the
assets given, equity instruments issued (if any), and liabilities assumed
or incurred at the date of acquisition.
Acquisition-related costs are expensed as incurred.
179
 N O T E S T O T H E F I N A N C I A L S TAT E M E N T S C O N T I N U E D
1 Accounting Policies continued
The results of the subsidiaries and businesses acquired are included in
the consolidated Financial Statements from the acquisition date.
Disposal of Subsidiaries
The financial performance of subsidiaries and businesses are included
in the Group Financial Statements up to the point on which the Group
ceases to have control over that subsidiary. Any amounts previously
recognised in other comprehensive income in respect of that entity,
including exchange gains or losses on foreign currency translation, are
accounted for as if the Group had directly disposed of related assets
and liabilities. This results in a reclassification of amounts previously
recognised in other comprehensive income to the Income Statement.
Non-Controlling Interests
On an acquisition-by-acquisition basis the non-controlling interest is
measured at either fair value or a proportionate share of the acquiree’s
net assets.
Purchases of non-controlling interests are accounted for as transactions
with the owners and therefore no goodwill is recognised as a result of
such transactions.
Revenue
Revenue from the sale of products is recognised in the Group Income
Statement as and when performance obligations are satisfied by
transferring control of the product or service to the customer.
Net Revenue is defined as the amount invoiced to external customers
during the year and comprises, as required by IFRS 15, gross sales net
of trade spend, customer allowances for credit notes, returns and
consumer coupons. The methodology and assumptions used to estimate
credit notes, returns and consumer coupons are monitored and adjusted
regularly in the light of contractual and legal obligations, historical trends,
past experience and projected market conditions.
Trade spend, which consists primarily of customer pricing allowances,
placement/listing fees and promotional allowances, is governed by sales
agreements with the Group’s trade customers (retailers and distributors).
Trade spend also includes reimbursement arrangements under the
Special Supplemental Nutrition Program for Women, Infants and Children
(WIC), payable to the respective US State WIC agencies.
Accruals are recognised under the terms of these agreements to reflect
the expected activity level and the Group’s historical experience. These
accruals are reported within trade and other payables.
Value-added tax and other sales taxes are excluded from Net Revenue.
Operating Segments
Operating segments are reported in a manner consistent with the
internal reporting provided to the Chief Operating Decision Maker
(CODM). The CODM, who is responsible for allocating resources and
assessing performance of the operating segments, has been identified
as the Group Executive Committee.
Research and Development
Research expenditure is expensed in the year in which it is incurred.
Development expenditure is expensed in the year in which it is incurred,
unless it meets the requirements of IAS 38 to be capitalised and then
amortised over the useful life of the developed product.
180 Reckitt Annual Report and Accounts 2020
Income Tax
Income tax on the profit/(loss) for the year comprises current and
deferred tax. Income tax is recognised in the Income Statement except
to the extent that it relates to items recognised in other comprehensive
income or directly in equity, in which case the tax is also recognised in
other comprehensive income or directly in equity, respectively.
Current tax is the expected tax payable on the taxable income for the
year, using tax rates enacted or substantively enacted in each jurisdiction
at the Balance Sheet date, and any adjustment to tax payable in respect
of previous years.
Deferred tax is provided in full, using the liability method, on temporary
differences arising between the tax bases of assets and liabilities and
their carrying amounts in the consolidated Financial Statements.
Deferred tax is not accounted for if it arises from the initial recognition of  
an asset or liability in a transaction (other than a business combination)
that affects neither accounting nor taxable profit or loss at that time.
Deferred tax is determined using tax rates (and laws) that have been
enacted or substantively enacted at the Balance Sheet date and are
expected to apply when the deferred tax asset or liability is settled.
Deferred tax assets are recognised to the extent that it is probable that
future taxable profit will be available against which the temporary
differences can be utilised.
Deferred tax is provided on temporary differences arising on
investments in subsidiaries except where the investor is able to control
the timing of the reversal of the temporary differences and it is probable
that the temporary difference will not reverse in the foreseeable future.
Deferred tax assets and liabilities within the same tax jurisdiction are
offset where there is a legally enforceable right to offset current tax
assets against current tax liabilities and where there is an intention to
settle these balances on a net basis.
Goodwill and Other Intangible Assets
(i) Goodwill
Goodwill is allocated to the cash generating unit (CGU), or group of
CGUs (GCGU), to which it relates and is tested annually for impairment.
Goodwill is carried at cost less accumulated impairment losses.
(ii) Brands
Separately acquired brands are shown at cost less accumulated
amortisation and impairment. Brands acquired as part of a business
combination are recognised at fair value at the acquisition date, where
they are separately identifiable. Brands are amortised over their useful
economic life (no more than ten years), except when their life is
determined as being indefinite.
Applying indefinite lives to certain acquired brands is appropriate due to
the stable long-term nature of the business and the enduring nature of
the brands. A core element of the Group’s strategy is to invest in building
its brands through an ongoing programme of product innovation and
increasing marketing investment. Within the Group, a brand typically
comprises an assortment of base products and more innovative
products. Both contribute to the enduring nature of the brand. The base
products establish the long-term positioning of the brand while a
succession of innovations attracts ongoing consumer interest and
attention. Indefinite life brands are allocated to the CGUs or GCGUs to
which they relate and are tested annually for impairment.
The Directors also review the useful economic life of brands annually, to
ensure that these lives are still appropriate. If a brand is considered to
have a finite life, its carrying value is amortised over that period.
 S T R AT E G I C R E P O R T G OV E R N A N CE
1 Accounting Policies continued
(iii) Software
Expenditure relating to the acquisition of computer software licences
and systems are capitalised at cost. The assets are amortised on a
straight-line basis over a period of seven years for systems and five years
or less for all other software licences.
(iv) Distribution Rights
Payments made in respect of product registration, acquired and
reacquired distribution rights are capitalised where the rights comply
with the above requirements for recognition of acquired brands. If the
registration or distribution rights are for a defined time period, the
intangible asset is amortised over that period. If no time period is defined,
the intangible asset is treated in the same way as acquired brands.
(v) Customer Contracts
Acquired customer contracts are capitalised at cost. These costs are
amortised on a straight-line basis over the period of the contract.
Amortisation of intangible assets in (ii) to (v) is charged to cost of goods
sold or net operating expenses depending on the use of the asset.
Property, Plant and Equipment
Property, plant and equipment is stated at cost less accumulated
depreciation and impairment, with the exception of freehold land, which
is shown at cost less impairment. Cost includes expenditure that is
directly attributable to the acquisition of the asset. Except for freehold
land and assets under construction, the cost of property, plant and
equipment is depreciated on a straight-line basis over the period of the
expected useful life of the asset. For this purpose, expected lives are
determined within the following limits:
• Freehold buildings: not more than 50 years;
• Leasehold land and buildings: the lesser of 50 years or the life of the
lease; and
• Owned plant and equipment: not more than 15 years (except for
environmental assets and spray dryers which are not more than 20
years).
In general, production plant and equipment and office equipment are
depreciated over ten years or less; motor vehicles and computer
equipment over five years or less.
Assets’ residual values and useful lives are reviewed, and adjusted if
necessary, at each Balance Sheet date. Property, plant and equipment is
reviewed for impairment if events or changes in circumstances indicate
that the carrying amount may not be appropriate. Freehold land is
reviewed for impairment on an annual basis.
Gains and losses on the disposal of property, plant and equipment are
determined by comparing the asset’s carrying value with any sale
proceeds, and are included in the Income Statement.
Leases
The Group has various lease arrangements for buildings (such as offices
and warehouses), cars, and IT and other equipment. Lease terms are
negotiated on an individual basis locally and subject to domestic rules
and regulations. At the inception of a lease contract, the Group assesses
whether the contract conveys the right to control the use of an
identified asset for a certain period in exchange for consideration, in
which case it is identified as a lease. The Group recognises a right of use
asset and a corresponding lease liability with respect to all lease
arrangements in which it is the lessee, except for short‑term leases
(defined as leases with a lease term of 12 months or less) and leases of
low value assets. For these leases, the Group recognises the lease
payments as an operating expense on a straight‑line basis over the term
of the lease.
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F I N A N C I A L S TAT E M E N T S
Right of Use Assets
At commencement date, right of use assets are measured at cost, which
comprises the following:
• The initial measurement of the lease liability;
• Prepayments before commencement date of the lease;
• Initial direct costs; and
• Costs to restore.
Subsequent to initial recognition right of use assets are depreciated on a
straight-line basis over the duration of the contract. Right of use assets
are assessed for impairment where indicators of impairment are present.
Lease Liabilities
At commencement date, lease liabilities are measured at the present
value of lease payments not yet paid including:
• Fixed payments excluding lease incentive receivables;
• Future contractually agreed fixed increases; and
• Payments related to renewals or early termination, when options to
renew or for early termination are reasonably certain to be exercised.
Subsequent to initial recognition lease liabilities are increased by the
interest costs on the lease liabilities and decreased by lease payments
made. Lease liabilities held are remeasured to account for revised future
payments.
Impairment of Assets
Assets that have indefinite lives, including goodwill and brands, are
tested annually for impairment at the level where cash flows are
considered to be largely independent. This testing is performed at either
the CGU or GCGU level. All assets are tested for impairment if there is an
event or circumstance that indicates that their carrying value may not be
recoverable. If an asset’s carrying value exceeds its recoverable amount
an impairment loss is recognised in the Income Statement. The
recoverable amount is the higher of the asset’s value in use and its fair
value less costs of disposal.
Value in use is calculated with reference to the future and terminal cash
flows expected to be generated by an asset (or group of assets where
cash flows are not identifiable to specific assets). The discount rates
used in the asset impairment reviews are based on weighted-average
cost of capital (WACC) specific to each CGU and GCGU, with the WACC
converted to the implied pre-tax rates.
Fair value less costs of disposal is calculated using a discounted cash
flow approach based on a market participant basis, with a post-tax
discount rate applied to projected risk-adjusted post-tax cash flows and
terminal value.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost
comprises materials, direct labour and an appropriate portion of
overhead expenses (based on normal operating capacity) required to
get the inventory to its present location and condition. Inventory
valuation is determined on a first in, first out (FIFO) basis. Net realisable
value represents the estimated selling price less applicable selling
expenses.
Trade and Other Receivables
Trade and other receivables are initially recognised at fair value less
transaction costs and subsequently held at amortised cost, less provision
for discounts and doubtful debts. Allowance losses are calculated by
reviewing lifetime expected credit losses using historic and forward-
looking data on credit risk.
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1 Accounting Policies continued
Trade and Other Payables
Trade and other payables are initially recognised at fair value including
transaction costs and subsequently carried at amortised cost.
Cash and Cash Equivalents
Cash and cash equivalents comprise cash balances and other deposits
with a maturity of less than three months when deposited.
For the purpose of the cash flow statement, bank overdrafts that form
an integral part of the Group’s cash management, and are repayable on
demand, are included as a component of cash and cash equivalents.
Bank overdrafts are included within short-term borrowings in the
Balance Sheet.
Borrowings
Interest-bearing borrowings are recognised initially at fair value less,
where permitted by IFRS 9, any directly attributable transaction costs.
Subsequent to initial recognition, interest-bearing borrowings are stated
at amortised cost with any difference between cost and redemption
value being recognised in the Income Statement over the period of
the borrowings on an effective interest basis.
Derivative Financial Instruments and Hedging Activity
The Group may use derivatives to manage its exposures to fluctuating
interest and foreign exchange rates. These instruments are initially
recognised at fair value on the date the contract is entered into and are
subsequently remeasured at their fair value. The method of recognising
the resulting gain or loss depends on whether the derivative is designated
as a hedging instrument and, if so, the nature of the item being hedged.
At the inception of designated hedge relationships, the Group
documents its risk management objectives and strategy for undertaking
various hedging transactions. The Group also documents its assessment,
both at hedge inception and on an ongoing basis, of whether the
derivatives that are used in hedging transactions are highly effective
in offsetting changes in cash flows or fair values of hedged items.
The Group designates certain derivatives as either:
• hedges of a particular risk associated with a recognised asset or
liability or a highly probable forecast transaction (cash flow hedges); or
• hedges of the fair value of recognised assets or liabilities or a firm
commitment (fair value hedges).
Derivatives designated as cash flow hedges:
The effective portion of changes in the fair value of derivatives that are
designated and qualify as cash flow hedges is recognised in other
comprehensive income and accumulated in the hedging reserve. Any
gain or loss relating to the ineffective portion is recognised immediately
in the Income Statement.
When the hedged forecast transaction subsequently results in the
recognition of a non-financial item such as inventory, the amount
accumulated in the hedging reserve and the cost of hedging reserve is
included directly in the initial cost of the non-financial item when it is
recognised. For all other transactions, the amounts accumulated in the
hedging reserve are recycled to the Income Statement in the period (or
periods) when the hedged item affects the Income Statement.
If the hedge no longer meets the criteria for hedge accounting or the
hedging instrument is sold, expires, is terminated, or is exercised, then
hedge accounting is discontinued prospectively. The amount that has
been accumulated in the hedging reserve remains in equity until it is
either included in the cost of a non-financial item or recycled to the
Income Statement.
182 Reckitt Annual Report and Accounts 2020
Derivatives designated as fair value hedges:
Fair value hedges are used to manage the currency and/or interest rate
risks to which the fair value of certain assets and liabilities are exposed.
Changes in the fair value are recognised in the Income Statement,
together with any changes in the fair value of the hedged asset or
liability that are attributable to the hedged risk. If such a hedge
relationship no longer meets hedge accounting criteria, fair value
movements on the derivative continue to be taken to the Income
Statement while any fair value adjustments made to the underlying
hedged item to that date are amortised through the Income Statement
over its remaining life using the effective interest rate method.
Changes in the fair value of any derivative instruments that do not
qualify for hedge accounting are recognised immediately in the
Income Statement.
Net Investment Hedges
Gains and losses on those hedging instruments designated as hedges
of the net investments in foreign operations are recognised in other
comprehensive income to the extent that the hedging relationship is
effective. Gains and losses accumulated in the foreign currency
translation reserve are recycled to the Income Statement when the
foreign operation is disposed of.
Equity Instruments (FVOCI)
Equity instruments (FVOCI) are investments that are neither held for
trading nor classified as investments in subsidiaries, associates or joint
arrangements. Subsequent to their initial recognition, equity instruments
(FVOCI) are stated at their fair value. Gains and losses arising from
subsequent changes in the fair value are recognised in the Income
Statement or in other comprehensive income on a case by case basis.
Accumulated gains and losses included in other comprehensive income
are not recycled to the Income Statement. Dividends from other
investments are recognised in the Income Statement.
Investment in Associates
Investments in associates are accounted for using the equity method.
An associate is an entity over which the Group has significant influence,
being the power to participate in the investee’s financial and operating
policy decisions without control or joint control.
Interests in associates are stated in the consolidated balance sheet
at cost, adjusted for the movement in the Group’s share of their net
assets and liabilities. The Group’s share of the profit or loss after tax of
associates is included in the Group’s consolidated profit before taxation.
Unrealised intragroup profits or losses from transactions are offset
against the carrying amount of the investment on a pro-rata basis
during consolidation, if material.
When the Group’s share of losses exceeds its interest in an associate,
the Group does not recognise further losses, unless it has incurred
obligations or made payments on behalf of the associate.
The Financial Statements of the companies accounted for using the
equity method are prepared in accordance with uniform accounting
and measurement methods throughout the Group.
Employee Share Schemes
Incentives in the form of shares are provided to employees under share
option and restricted share schemes vested in accordance with
non-market conditions.
 S T R AT E G I C R E P O R T G OV E R N A N CE
1 Accounting Policies continued
The fair value determined at the grant date of the equity-settled
share-based payments is expensed on a straight-line basis over the
vesting period, based on the Group’s estimate of equity instruments that
will eventually vest. At each Balance Sheet date, the Group revises its
estimate of the number of equity instruments expected to vest. The
impact of the revision of the original estimates, if any, is recognised in
profit or loss such that the cumulative expense reflects the revised
estimate, with a corresponding adjustment to equity reserves.
Additional employer costs, including social security taxes, in respect of
options and awards are charged to the Income Statement over the same
period with a corresponding liability recognised.
Repurchase and Reissuance of Ordinary Shares
When shares recognised as equity are repurchased, the amount of the
consideration paid, including directly attributable costs, is recognised as
a charge to equity. Repurchased shares are classified as Treasury shares
and are presented in retained earnings. When Treasury shares are sold or
reissued subsequently, the amount received is recognised as an increase
in equity and any resulting surplus is presented within share premium or
deficit presented within retained earnings.
Pension Commitments
Group companies operate defined contribution and (funded and
unfunded) defined benefit pension plans.
The cost of providing pensions to employees who are members of
defined contribution plans is charged to the Income Statement as
contributions are made. The Group has no further payment obligations
once the contributions have been paid.
The deficit or surplus recognised in the Balance Sheet in respect of
defined benefit pension plans is the present value of the defined
benefit obligation at the Balance Sheet date, less the fair value of
the plan assets. The defined benefit obligation is calculated annually
by independent actuaries using the projected unit credit method.
The present value of the defined benefit obligation is determined by
discounting the estimated future cash flows by the yield on high-quality
corporate bonds denominated in the currency in which the benefits
will be paid, and that have a maturity approximating to the terms of
the pension obligations. The costs of providing these defined benefit
plans are accrued over the period of employment. Actuarial gains and
losses are recognised immediately in other comprehensive income.
Past-service costs are recognised immediately in profit or loss.
The net interest amount is calculated by applying the discounted rate
used to measure the defined benefit obligation at the beginning of the
period to the net defined benefit liability/asset.
The net pension plan interest is presented as finance income/expense.
Post-Retirement Benefits Other than Pensions
Some Group companies provide post-retirement medical care to their
retirees. The costs of providing these benefits are accrued over the
period of employment and the liability recognised in the Balance Sheet is
calculated using the projected unit credit method and is discounted to
its present value and the fair value of any related asset is deducted.
Reckitt Annual Report and Accounts 2020
F I N A N C I A L S TAT E M E N T S
Provisions
Provisions are recognised when the Group has a present legal or
constructive obligation as a result of past events; it is more likely than not
that there will be an outflow of resources to settle that obligation; and
the amount can be reliably estimated. Provisions are valued at the
present value of the Directors’ best estimate of the expenditure required
to settle the obligation at the Balance Sheet date. Where it is possible
that a settlement may be reached or it is not possible to make a reliable
estimate of the estimated financial impact, appropriate disclosure is
made but no provision recognised.
Share Capital Transactions
When the Group purchases equity share capital, the amount of the
consideration paid, including directly attributable costs, is recognised as
a change in equity. Purchased shares are either held in Treasury, in order
to satisfy employee options, or cancelled and, in order to maintain
capital, an equivalent amount to the nominal value of the shares
cancelled would be transferred from retained earnings.
Dividend Distribution
Dividends to owners of the parent company are recognised as a liability
in the period in which the dividends are approved by the company’s
shareholders. Interim dividends are recorded in the period in which they
are approved and paid.
Dividend payments are recorded at fair value. Where non-cash dividend
payments are made, gains arising as a result of fair value
remeasurements are recognised in profit or loss in the same period.
Accounting Estimates and Judgements
In preparing these consolidated Financial Statements, management
has made judgements and estimates that affect the application of
the Group’s accounting policies and the reported amounts of assets,
liabilities, income and expenses. Actual amounts and results may differ
from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the period in
which the estimate is revised if the revision affects only that period, or in
the period of the revision and future periods if the revision affects both
current and future periods.
Critical judgements in applying the Group’s accounting policies
Over the course of the year, management has made a number of critical
judgements in the application of the Group’s accounting policies. These
include the following:
• Management has identified matters (including the Korea HS issue)
that may incur liabilities in the future but does not recognise these
liabilities when it is too early to determine the likely outcome or make
a reliable estimate (Note 18, Note 20).
• The continuing enduring nature of the Group’s brands supports the
indefinite life assumption of these assets (Note 9).
• Assumptions are made as to the recoverability of tax assets
especially as to whether there will be sufficient future taxable profits
in the same jurisdictions to fully utilise losses in future years (Note 12).
Key sources of estimation uncertainty
Each year, management is required to make a number of assumptions
regarding the future. The related year-end accounting estimates will, by
definition, seldom equal the final actual results. The estimates and
assumptions that have a significant risk of causing a material adjustment
to the carrying amounts of assets and liabilities within the next financial
year are addressed below.
183
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1 Accounting Policies continued
Goodwill and Indefinite life intangible assets:
Under IFRS, goodwill and other indefinite life intangible assets must be
tested for impairment on at least an annual basis. As disclosed further in
Note 9, this testing generally requires management to make multiple
estimates, for example around individual market pressures and forces,
future price and volume growth, future margins, terminal growth rates
and discount rates. In 2020, the Group recognised impairment losses of
£985 million, all of which related to IFCN goodwill (2019: £5,116 million,
with £5,037 million relating to IFCN goodwill). In addition to the above,
the IFCN impairment assessment incorporated estimates relating to
future birth rates, cross border trade between Hong Kong and mainland
China, and future WIC tendering in the US. Refer to Note 9 for further
information, including details on the sensitivity of the IFCN value-in-use
model to reasonable changes in key assumptions.
Tax:
The actual tax paid on profits is determined based on tax laws and
regulations that differ across the numerous jurisdictions in which the
Group operates. Assumptions are made in applying these laws to the
taxable profits in any given period in order to calculate the tax charge for
that period. Where the eventual tax paid or reclaimed is different to the
amounts originally estimated, the variance is charged or credited to the
Income Statement in the period in which it is determined (Note 7).
The Group operates in an international tax environment and is subject
to tax examinations and uncertainties in a number of jurisdictions.
The issues involved can be complex and disputes may take a number
of years to resolve. Each uncertainty is separately assessed and
management applies judgement in the recognition and measurement
of the uncertainty based on the relevant circumstances. The exposure
recognised is calculated based on the expected value method or
the most likely outcome method, depending on whether there are a
wide range of possible outcomes or if resolution of the uncertainty
is concentrated on one outcome. In particular, the range of possible
outcomes relating to transfer pricing exposures can be wide and
in these scenarios the expected value method is employed. The
accounting estimates and judgements considered include:
• Status of the unresolved matter;
• Clarity of relevant legislation and related guidance;
• Pre-clearances issued by taxing authorities;
• Advice from in-house specialists and opinions of professional firms;
• Resolution process and range of possible outcomes;
• Past experience and precedents set by the particular taxing
authority;
• Decisions and agreements reached in other jurisdictions on
comparable issues;
• Unutilised tax losses, tax credits and availability of mutual agreement
procedures between tax authorities; and
• Statute of limitations.
Management is of the opinion that the carrying values of the provisions
made in respect of these matters represent the most accurate
measurement once all facts and circumstances have been taken into
account. Nevertheless, the final amounts paid to discharge the liabilities
arising (either through negotiated settlement or litigation) will in all
likelihood be different from the provision recognised. The net liabilities
recognised in respect of uncertain tax positions as at 31 December 2020
are £950 million (2019: £891 million) (Note 22).
184 Reckitt Annual Report and Accounts 2020
Trade spend:
The Group provides for amounts payable to our trade customers for
promotional activity and government reimbursement arrangements.
Where an activity spans across the year end, an accrual is reflected in
the consolidated Financial Statements based on our estimation of
customer and consumer uptake during the relevant period and the
extent to which temporary funded activity has occurred. There is a
timing difference between that initial estimation and final settlement
of trade spend with our customers – the result of which could lead to
variations between the two. As at 31 December 2020, the Group has
recognised total accruals of £1,275 million (2019: £1,095 million) in respect
of amounts payable to trade customers and government bodies for
trade spend. The Group's trade spend arrangements vary considerably
by market and category, and the Group's trade spend accruals is
made up of many individually small accruals. Therefore, an aggregated
disclosure of sensitivity analysis on the key inputs to trade spend accrual
estimates would not be practicable nor meaningful. Nevertheless, a
12% (2019: 14%) difference between those initial estimates and final
settlement would cause a material adjustment in the next financial year.
Refer to Note 21 for further information.
Other estimates
Set out below are other estimates where there is a risk of adjustment to
the carrying amounts of assets and liabilities within the next financial
year, but the risk of a material adjustment is not significant.
Legal provisions:
The Group recognises legal provisions in line with the Group’s provisions
policy. The level of provisioning in relation to civil and/or criminal
investigations is an area where management and legal judgement are
important, with individual provisions being based on best estimates of the
potential loss, considering all available information, external advice and
historical experience. As at 31 December 2020, the Group recognised legal
provisions of £232 million (2019: £151 million) in relation to a number of
historical regulatory and other matters in various jurisdictions.
Defined benefit pension plan:
The value of the Group’s defined benefit pension plan obligations is
dependent on a number of key assumptions. These assumptions include
the rate of increase in pensionable salaries, the discount rate to be
applied, the level of inflation and the life expectancy of the schemes'
members. Details of the key assumptions and the sensitivity of the
principal schemes’ carrying value to changes in the assumptions are
set out in Note 23.
2 Operating Segments
The Group’s operating segments comprise of the Hygiene, Health and
Nutrition business units reflecting the way in which information is
presented to and reviewed by the Group’s Chief Operating Decision
Maker (CODM) for the purposes of making strategic decisions and
assessing Group-wide performance. In the second half of 2020, the
Group’s operating segments changed as the information presented to
and reviewed by the Group’s CODM was aligned to organisational
changes which were implemented by the Group on 1 July 2020.
The CODM is the Group Executive Committee. This Committee is
responsible for the implementation of strategy (approved by the Board),
the management of risk (delegated by the Board) and the review of
Group operational performance and ongoing business integration.
The Group Executive Committee assesses the performance of these
operating segments based on Net Revenue from external customers
and segment profit being adjusted operating profit. Intercompany
transactions between operating segments are eliminated. Finance
income and expense are not allocated to segments, as each is managed
on a centralised basis.
 S T R AT E G I C R E P O R T G OV E R N A N CE F I N A N C I A L S TAT E M E N T S

2 Operating Segments continued

The segment information for the operating segments for the year ended 31 December 2020 and 31 December 2019 is as follows:

Adjusting
Hygiene Health Nutrition Items Total
Year ended 31 December 2020 £m £m £m £m £m

Net Revenue 5,816 4,890 3,287 – 13,993

Depreciation & amortisation (128) (142) (122) (80) (472)
Operating Profit 1,505 1,334 462 (1,141) 2,160
Net finance expense (286)
Share of loss from associates (1)
Profit before income tax 1,873
Income tax expense (720)
Net income from continuing operations 1,153

Adjusting
Hygiene Health Nutrition Items Total
Year ended 31 December 2019 (restated)* £m £m £m £m £m

Net Revenue 5,031 4,462 3,353 – 12,846

Depreciation & amortisation (117) (135) (97) (81) (430)
Operating Profit/(Loss) 1,279 1,370 718 (5,321) (1,954)
Net finance expense (153)
Loss before income tax (2,107)
Income tax expense (665)
Net loss from continuing operations (2,772)

* Segmental information for the year ended 31 December 2019 has been restated to reflect the Group’s current operating segments, which changed in the second half of 2020.

Financial information for the Hygiene, Health and Nutrition operating segments is presented on an adjusted basis, which excludes certain cash and
non-cash items which management believes are not reflective of the underlying financial performance of the business. Financial information on an
adjusted basis is consistent with how management reviews the business for the purpose of making operating decisions. Adjusting items to operating
profit comprise exceptional items and other adjusting items.

• Exceptional items are material, non-recurring items of expense or income.

• Other adjusting items includes the amortisation of certain fair value adjustments recorded in respect of finite-life intangible assets recognised in
the purchase price allocation for the acquisition of MJN. These are not classified as exceptional items because of their recurring nature.

The company is domiciled in the UK. The split of Net Revenue from external customers and Non-Current Assets (other than equity instruments,
deferred tax assets and retirement benefit surplus assets) between the UK, the US and Greater China (US and Greater China being the two biggest
countries outside the country of domicile) and that from all other countries is:
Greater All other
UK US China1 countries Total
2020 £m £m £m £m £m

Net Revenue 811 3,955 1,561 7,666 13,993

Goodwill and other intangible assets 2,018 9,473 4,303 7,185 22,979
Property, plant and equipment 324 563 170 1,176 2,233
Other non-current receivables 25 55 1 65 146

1. Greater China represents mainland China, Hong Kong and Taiwan

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2 Operating Segments continued

Greater All other
UK US China1 countries Total
2019 £m £m £m £m £m

Net Revenue 743 3,227 1,534 7,342 12,846

Goodwill and other intangible assets 2,006 9,955 4,948 7,352 24,261
Property, plant and equipment 291 532 141 1,176 2,140
Other non-current receivables 8 62 2 83 155

1. Greater China represents Mainland China, Hong Kong and Taiwan

Major customers are typically large grocery chains, mass markets and multiple retailers. The Group’s customer base is diverse with no individual
customer accounting for more than 10% of Net Revenue (2019: no individual customer accounting for more than 10%).

3 Analysis of Net Operating Expenses

2020 2019
£m £m

Distribution costs (3,611) (3,417)

Research and development (288) (257)
Other administrative expenses (1,393) (945)
Other net operating income 2 3
Net operating expenses (5,290) (4,616)

A net foreign exchange loss of £5 million (2019: £2 million loss) has been recognised through the Income Statement.

4 Auditor Remuneration
During the year, the Group (including its overseas subsidiaries) obtained the following services from the company’s Auditor and its associates.

2020 2019
£m £m

Audit services pursuant to legislation

Audit of the Group’s Annual Report and Financial Statements 4.4 4.6
Audit of the Financial Statements of the Group’s subsidiaries 7.5 8.0
Audit-related assurance services 0.6 0.6
Total audit and audit-related services 12.5 13.2
Fees payable to the company’s Auditor and its associates for other services
Other Assurance services 0.2 1.3
Total non-audit services 0.2 1.3
12.7 14.5

5 Employees
Staff Costs
The total employment costs, including Directors, were:

2020 2019
Note £m £m

Wages and salaries 1,970 1,558

Social security costs 263 246
Other pension costs 23 54 60
Share-based payments 25 15 18
Total staff costs 2,302 1,882

Executive Directors’ aggregate emoluments are disclosed in the Directors’ Remuneration Report.

186 Reckitt Annual Report and Accounts 2020

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5 Employees continued
Compensation awarded to key management (the Group Executive Committee) was:
2020 2019
£m £m

Short-term employee benefits 26 13

Share-based payments 9 5
35 18

Staff Numbers
The monthly average number of people employed by the Group, including Directors, during the year was:
2020 2019
‘000 ‘000

North America 4.7 4.3

Europe/ANZ 14.1 13.3
DvM 25.1 24.8
43.9 42.4

6 Net Finance Expense

2020 2019
£m £m

Finance income
Interest income on cash and cash equivalents 61 96
Movement on put option liability – 25
Other finance income 16 40
Total finance income 77 161
Finance expense
Interest payable on borrowings (276) (331)
Finance (expense)/credit on tax balances (26) 35
Movement on put option liability (9) –
Other finance expense (52) (18)
Total finance expense (363) (314)
Net finance expense (286) (153)

All net finance expense relates to continuing operations only.

7 Income Tax Expense

2020 2019
£m £m

Current tax 740 640

Adjustment in respect of prior periods (45) 36
Total current tax 695 676
Origination and reversal of temporary differences (56) (10)
Impact of changes in tax rates 81 (1)
Total deferred tax 25 (11)
Income tax expense 720 665

Current tax includes tax incurred by UK entities of £135 million (2019: £95 million). This is comprised of UK corporation tax of £85 million (2019: £79
million) and overseas tax suffered of £50 million (2019: £16 million). UK current tax is calculated at 19% (2019: 19%) of the estimated assessable profit for
the year, net of relief for overseas taxes where available. Taxation in other jurisdictions is calculated at the rates prevailing in the relevant jurisdictions.

Cash tax paid in the year was £762 million (2019: £647 million). The variance from the current tax charge of £740 million is attributable to movements
on non-current tax liabilities (shown in Note 22) and timing differences arising between accrual and payment of income tax liabilities.

Origination and reversal of temporary differences includes adjustments in respect of prior periods of £22 million expense (2019: £12 million expense).

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7 Income Tax Expense continued

The total tax charge on the Group’s profits for the year can be reconciled to the notional tax charge calculated at the UK tax rate as follows:

2020 20191
Continuing operations £m £m

Profit/(loss) before income tax 1,873 (2,107)

Tax at the notional UK corporation tax rate of 19% (2019: 19%) 356 (400)
Effect of:
Overseas tax rates 43 77
Movement in provision related to uncertain tax positions 41 (46)
Unrecognised tax losses and other unrecognised tax assets (38) (42)
Withholding and local taxes 31 71
Reassessment of prior year estimates (23) 48
Impact of changes in tax rates 81 (1)
Permanent differences 229 958
Income tax expense 720 665

1. The 2019 presentation has been revised to be consistent with 2020

Our effective tax rate in any given financial year reflects a variety of factors that may not be present in succeeding financial years, and may be
affected by variations in profit mix and changes in tax laws, regulations and related interpretations.

The effect of overseas tax rates represents the impact of profits arising outside the UK that are taxed at different rates to the UK rate

Unrecognised tax losses and other unrecognised tax assets arising in 2020 relates to previously unrecognised losses (2019 – same).

Withholding and local taxes includes a provision for deferred tax on unremitted earnings (Note 12). This charge is expected to arise on planned
repatriations of retained earnings from overseas subsidiaries in future periods.

The reassessment of prior year estimates includes settlements reached following conclusion of reviews of tax authorities and differences between
the final tax return submissions and liabilities accrued in these Financial Statements.

The impact of changes in tax rates in 2020 primarily results from the revaluation of deferred tax liabilities relating to intangible assets following
increases in tax rates substantively enacted by the UK and Netherlands governments.

Permanent differences in 2020 and 2019 principally related to the non-deductible impairment of goodwill in IFCN.

We conduct business operations in a number of countries, and are therefore subject to tax and intercompany pricing laws in multiple jurisdictions. We
have in the past faced, and may in the future face, audits and challenges brought by tax authorities, and we are involved in ongoing tax investigations
in a number of countries. If material challenges were to be successful, our effective tax rate may increase, we may be required to modify structures
at significant costs to us, we may also be subject to interest and penalty charges and we may incur costs in defending litigation or reaching a
settlement. Any of the foregoing could materially and adversely affect our business, financial condition and results of operations.

EC State Aid
In connection with the European Commission’s (EC) decision that the UK Controlled Foreign Company (CFC) Legislation up to 31 December 2018 partially
represented state aid, the UK government introduced a new law, Taxation (Post-transition Period) Act 2020, Recovery of Unlawful State Aid Rules, which
received Royal Assent on 17 December 2020. This new legislation facilitates the collection of the alleged unlawful state aid, as is required under EU rules.

Post year end the Group received charging notices under this new legislation which it will be required to pay whilst the case is being resolved
through the European courts. Nothing from these notices has changed management’s assessment of no provision being required at this time.

UK Corporation Tax Rate Change

The March 2021 UK Budget announced an increase in the UK corporation tax rate from 19% to 25% with effect from 1 April 2023. This will increase the
future current tax charge on the Group’s profits arising in the UK. Based on the values presented in the balance sheet at 31 December 2020, the UK
corporation tax rate change would increase net deferred tax liabilities by approximately £220 million in the period in which it is substantively enacted.

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7 Income Tax Expense continued

The tax (charge)/credit relating to components of other comprehensive income is as follows:

2020 2019
Tax (charge)/ Tax (charge)/
Before tax credit After tax Before tax credit After tax
£m £m £m £m £m £m

Net exchange (losses) on foreign currency translation (207) – (207) (579) – (579)
(Losses)/gains on cash flow and net investment hedges (95) 3 (92) 60 1 61
Remeasurement of defined benefit pension plans (Note 23) (75) 15 (60) 12 2 14
Revaluation of equity instruments – FVOCI 31 (12) 19 (13) – (13)
Other comprehensive income/(loss) (346) 6 (340) (520) 3 (517)
Current tax 1 –
Deferred tax (Note 12) 5 3
6 3

The tax credited/(charged) directly to the Statement of Changes in Equity during the year is as follows:
2020 2019
£m £m

Current tax 6 4
Deferred tax (Note 12) (2) –
4 4

8 Earnings Per Share

2020 2019
pence pence

Basic earnings/(loss) per share

From continuing operations 160.0 (393.0)
From discontinued operations 7.0 (126.7)
Total basic earnings/(loss) per share 167.0 (519.7)
Diluted earnings/(loss) per share
From continuing operations 159.3 (393.0)
From discontinued operations 7.0 (126.7)
Total diluted earnings/(loss) per share 166.3 (519.7)

Basic
Basic earnings per share is calculated by dividing the net income/(loss) attributable to owners of the parent company from continuing operations
(2020: £1,137 million income; 2019: £2,785 million loss) and discontinued operations (2020: £50 million income; 2019: £898 million loss) by the weighted
average number of ordinary shares in issue during the year (2020: 710,907,200; 2019: 708,688,420).

Diluted
Diluted earnings per share is calculated by adjusting the weighted average number of shares outstanding to assume conversion of all potentially
dilutive ordinary shares. The company has the following categories of potentially dilutive ordinary shares: Executive Share Awards (including Executive
Share Options and Executive Restricted Share Scheme Awards) and Employee Sharesave Scheme Options. The options only dilute earnings when
they result in the issue of shares at a value below the market price of the share and when all performance criteria (if applicable) have been met. As
at 31 December 2020 there were 1,865,524 (2019: 7,970,362) Executive Share Awards excluded from the dilution because the exercise price for the
options was greater than the average share price for the year or the performance criteria have not been met.

2020 Average 2019 Average

number of shares number of shares

On a basic basis 710,907,200 708,688,420

Dilution for Executive Share Awards1 61,251 –
Dilution for Employee Sharesave Scheme Options outstanding1 2,778,499 –
On a diluted basis 713,746,950 708,688,420

1. As there was a loss in 2019, the effect of potentially dilutive shares is anti-dilutive

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9 Goodwill and Other Intangible Assets

Brands Goodwill Software Other Total
£m £m £m £m £m

Cost
At 1 January 2019 18,370 11,851 303 168 30,692
Additions 1 – 136 – 137
Arising on business combinations – 14 – – 14
Disposals – – (3) (1) (4)
Reclassifications – – (11) 11 –
Exchange adjustments (560) (349) (9) (3) (921)
At 31 December 2019 17,811 11,516 416 175 29,918
Additions 3 – 84 5 92
Disposals – – (1) – (1)
Reclassifications – – (10) 10 –
Exchange adjustments (141) (108) 1 (5) (253)
At 31 December 2020 17,673 11,408 490 185 29,756
Accumulated amortisation and impairment
At 1 January 2019 250 18 93 53 414
Amortisation and impairment 141 5,037 48 23 5,249
Disposals – – (3) – (3)
Exchange adjustments (1) (1) (2) 1 (3)
At 31 December 2019 390 5,054 136 77 5,657
Amortisation and impairment 63 985 55 25 1,128
Disposals – – (1) – (1)
Exchange adjustments (4) – – (3) (7)
At 31 December 2020 449 6,039 190 99 6,777
Net book value
At 31 December 2019 17,421 6,462 280 98 24,261
At 31 December 2020 17,224 5,369 300 86 22,979

The amount stated for brands represents the fair value of brands acquired since 1985 at the date of acquisition. Other includes product registration,
distribution rights, capitalised product development costs and customer contracts.

Software includes intangible assets under construction of £37 million (2019: £55 million).

The majority of brands, all of goodwill and certain other intangibles are considered to have indefinite lives for the reasons noted in the accounting
policies and therefore are subject to an annual impairment review. The MJN global brand, acquired MJN WIC contracts and a number of small
non-core brands are deemed to have a finite life and are amortised accordingly. Amortisation is recognised in net operating expenses or cost of
goods sold depending on the use of the asset.

The net book values of indefinite and finite life intangible assets are as follows:
2020 2019
Net book value £m £m

Indefinite life assets

Brands 16,857 16,989
Goodwill 5,369 6,462
Other 36 49
Total indefinite life assets 22,262 23,500
Finite life assets
Brands 367 432
Software 300 280
Other 50 49
Total finite life assets 717 761
Total net book value of intangible assets 22,979 24,261

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9 Goodwill and Other Intangible Assets continued

Cash Generating Units
Goodwill and other intangible assets with indefinite lives are allocated to either individual cash generating units (CGUs), or groups of cash generating
units (together GCGUs). The goodwill and intangible assets with indefinite lives are tested for impairment at the level at which identifiable cash
inflows are largely independent. Generally this is at a GCGU level, but for certain intangible assets this is at a CGU level.

After considering all the evidence available, including how brand and production assets generate cash inflows and how management monitors the
business, the Directors have concluded that for the purpose of impairment testing of goodwill and other intangible assets, the Group’s GCGUs are as
follows: Health, Hygiene and IFCN. In 2020, VMS was identified as a separate CGU which previously formed part of the Health GCGU in 2019.

An analysis of the net book value of indefinite life assets and goodwill by GCGU and the new CGU in 2020 is shown below:

2020
Indefinite
life assets Goodwill Total
GCGU/CGU Power brands £m £m £m

Health Durex, Gaviscon, Mucinex, Nurofen, Scholl, Strepsils, Clearasil, Dettol, Veet 6,028 3,354 9,382
Hygiene Cillit Bang, Finish, Harpic, Lysol, Mortein, Air Wick, Calgon, Vanish, Woolite 1,780 45 1,825
IFCN Enfamil, Nutramigen 8,124 1,725 9,849
VMS 1
MegaRed 961 245 1,206
16,893 5,369 22,262

1. VMS is a CGU previously included within the Health GCGU in 2019

2019
Indefinite
life assets Goodwill Total
GCGU Power brands £m £m £m

Health Durex, Gaviscon, Mucinex, Nurofen, Scholl, Strepsils, Clearasil, Dettol, Veet 7,087 3,671 10,758
Hygiene Cillit Bang, Finish, Harpic, Lysol, Mortein, Air Wick, Calgon, Vanish, Woolite 1,784 45 1,829
IFCN Enfamil, Nutramigen 8,167 2,746 10,913
17,038 6,462 23,500

Within the Health GCGU, the cash flows of certain brands are separately identifiable. As a result, the carrying values of the associated indefinite life
assets have been tested for impairment as CGUs. This is in addition to the impairment testing over the GCGUs. The CGUs tested separately in 2020
are shown below.
2020
Indefinite life assets excluding goodwill £m

Sexual Wellbeing 2,170

Oriental Pharma 49

2019
Indefinite life assets excluding goodwill £m

Sexual Wellbeing 2,167

Oriental Pharma 47

Annual Impairment Review

Goodwill and other indefinite life intangible assets must be tested for impairment on at least an annual basis. An impairment loss is recognised when
the recoverable amount of a GCGU or CGU falls materially below its net book value at the date of testing.

The determination of recoverable amount, being the higher of value-in-use and fair value less costs to dispose, is inherently judgemental and requires
management to make multiple estimates, for example around individual market pressures and forces, future price and volume growth, future margins,
terminal growth rates and discount rates.

When forecasting the annual cash flows that support the recoverable amount calculations, the Group generally uses its short-term budgets and
medium-term strategic plans, with additional senior management and Board-level review. Cash flows beyond the five-year period are projected
using steady or progressively declining growth rates followed by a terminal growth rate. These rates do not exceed the long-term average growth
rate for the products and markets in which the GCGU or CGU operates.

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9 Goodwill and Other Intangible Assets continued

The cash flows are discounted back to their present value using a pre-tax rate considered appropriate for each GCGU and CGU. In 2020, as in 2019,
these rates have been derived from management’s views on the relevant weighted average cost of capital, subsequently converted to the pre-tax
equivalent rate.

For the Health and Hygiene GCGUs as well as the Sexual Wellbeing and VMS CGUs, any reasonably possible change in the key valuation assumptions
would not imply possible impairment. Each of these assessments utilised a pre-tax discount rate of 10% and a terminal growth rate of either 3%
(Health, VMS and Sexual Wellbeing) or 2% (Hygiene).

IFCN
On 15 June 2017, the Group acquired 100% of the issued share capital of MJN for cash consideration of £13,044 million ($16,642 million). The acquisition
was treated as a business combination and hence both the assets acquired, and liabilities assumed, were brought onto the Group Balance Sheet at
their fair value.

In 2019 the Group determined that the IFCN net book value exceeded its recoverable amount. The Group accordingly recognised an impairment loss
of £5,037 million against IFCN goodwill, to record IFCN at its recoverable amount of £9,890 million. Following the recognition of this impairment loss,
no headroom remained between the IFCN recoverable amount and net book value.

During 2020 IFCN’s performance fell below expectations, particularly in Greater China due to ongoing restrictions on cross border trade between
Hong Kong and mainland China, and the impact of increased local competition, despite holding market share in mainland China. Additionally,
operating margins were impacted by product write-offs due to lack of trade between Hong Kong and mainland China. The COVID-19 pandemic and
the resultant recession further impacted global IFCN performance. The Group considers these headwinds to be temporary and does not anticipate
these factors to significantly impact its long-term expectations for the IFCN business. However, as a result, for the 2020 IFCN impairment assessment
the Group has revised down its near-term expectations for IFCN ahead of anticipated medium-term recovery and margin improvement from ongoing
and future productivity programmes. The Group’s expectations for IFCN operating margins in the medium term are consistent with assumptions in
the prior year’s impairment assessment.

In 2020, as a result of the COVID-19 pandemic additional uncertainty has been introduced into the valuation of IFCN. To reflect this uncertainty
management has increased the pre-tax discount rate used to determine value-in-use. This resulted in the IFCN net book value exceeding its
recoverable amount, therefore management has recorded an impairment loss against IFCN goodwill of £985 million to record IFCN at its recoverable
amount of £8,810 million.

The recoverable amount for IFCN has been calculated on a value-in-use basis (2019: value-in-use basis). The value-in-use of IFCN was determined
utilising a discounted cash flow approach with future cash flows derived from a detailed five-year financial plan. Cash flows beyond the five-year
plan are projected using steady or progressively declining growth rates followed by a terminal growth rate. The valuation used a pre-tax discount rate
of 9.6% (2019: 9.0%) and an IFCN specific terminal growth rate of 2.5% (2019: 2.5%).

The determination of the recoverable amount for IFCN at 31 December 2020 incorporates certain key assumptions, some of which are subject to
considerable uncertainty. These assumptions include but are not limited to the duration of the COVID-19 pandemic, the resultant recession and the
impact on birth rates, the duration of cross border trade restrictions between Hong Kong and mainland China and the commercial success of new
product launches, including adult nutrition, and the expansion of specialty nutrition. As no headroom exists between the IFCN recoverable amount
and net book value, any changes to these assumptions, or any deterioration in other macro or business-level assumptions supporting the IFCN
recoverable amount could necessitate the recognition of impairment losses in future periods.

The expected Net Revenue and Gross Margin growth rates included within the 2020 impairment assessment are outlined below, and reflect the
lower base in 2020 in the calculation of the growth rates:

2020

Annual growth in Net Revenue between 2021 and 20301 3% to 5%

Annual growth in Gross Margin between 2021 and 20301 3% to 6%

2019

Annual growth in Net Revenue between 2020 and 20291 2% to 4%

Annual growth in Gross Margin between 2020 and 20291 2% to 4%

1. At constant exchange rates, excluding the impact of future foreign exchange movements

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9 Goodwill and Other Intangible Assets continued

The key estimates incorporated within the determination of the IFCN recoverable amount are summarised below:

Key estimates Commentary

Greater China In the short to medium term, management expects that Greater China will continue to be impacted by increased competition and
market regulation combined with generally subdued domestic birth rates. Management currently expects the restrictions on cross border
trade between Hong Kong and mainland China to be removed in the short term, which is a source of uncertainty.
US market In the US, management expects market conditions to be relatively stable but be impacted by a medium-term decline in birth rates
due to COVID-19. Tendering for WIC contracts continues to remain highly competitive.
Net Revenue In the short to medium term, management expects to achieve Net Revenue growth (excluding the impact of foreign exchange
movements) of between 3% and 5% per annum. This is expected to be achieved through a mix of ongoing premiumisation, price
increases, volume growth and revenues from new products/category launches including adult nutrition and the expansion of
speciality nutrition.
Margins In the short to medium term, management expects IFCN margins (both gross and operating) to increase from current levels as the
temporary factors which impacted margins in 2020 unwind and IFCN realises benefits from Reckitt’s multi-year productivity
programme. Management's expectations for IFCN operating margins in the medium term are consistent with assumptions in the prior
year's impairment assessment.
Discount rate Management determined an IFCN-specific weighted average cost of capital (WACC) and the implied pre-tax discount rate with the
support of a third-party expert. In addition, management performed benchmarking against other comparable companies. For
valuation purposes management used the upper end of the calculated range in 2020 to reflect considerable uncertainty in certain
key assumptions.
Terminal Management engaged a third-party expert to help calculate an IFCN-specific terminal growth rate. Management is satisfied with the
growth rate reasonableness of this rate when compared against independent market growth projections and long-term country inflation rates.

The table below shows the sensitivity of the 2020 recoverable amount to reasonable changes in key assumptions. The table assumes no related
response by management (e.g. to drive further cost savings) and is hence theoretical in nature.

(£m)

Expected Net Revenue growth rates (2021 to 2030) adjusted by 100bps +/- 900
Expected EBIT growth rates (2021 to 2030) adjusted by 100bps +/- 600
Terminal growth rate (applied from 2031) adjusted by 50bps +600 / -500
Pre-tax discount rate adjusted by 50bps +700 / -600

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10 Property, Plant and Equipment

Land and Plant and Right of use Assets under
buildings equipment Assets construction Total
£m £m £m £m £m

Cost
At 1 January 2019 1,117 1,857 374 327 3,675
Additions 14 53 69 239 375
Disposals (3) (54) (75) (2) (134)
Reclassifications 67 164 – (231) –
Exchange adjustments (43) (83) (15) (9) (150)
At 31 December 2019 1,152 1,937 353 324 3,766
Additions 27 58 89 309 483
Disposals (9) (48) (21) (6) (84)
Reclassifications 98 183 – (281) –
Exchange adjustments (23) (29) (12) (14) (78)
At 31 December 2020 1,245 2,101 409 332 4,087
Accumulated depreciation and impairment
At 1 January 2019 343 1,100 70 – 1,513
Charge for the year 57 180 66 – 303
Disposals (3) (40) (69) – (112)
Impairment – 2 – – 2
Exchange adjustments (16) (61) (3) – (80)
At 31 December 2019 381 1,181 64 – 1,626
Charge for the year 62 185 80 – 327
Disposals (8) (46) (17) – (71)
Impairment 1 1 – – 2
Exchange adjustments (5) (20) (5) – (30)
At 31 December 2020 431 1,301 122 – 1,854
Net book value
As at 31 December 2019 771 756 289 324 2,140
As at 31 December 2020 814 800 287 332 2,233

At 31 December 2020, the Group’s right of use assets included land & buildings of £267 million (2019: £268 million) and other assets of £19 million
(2019: £21 million). The Group recognised depreciation of £66 million (2019: £54 million) on the land & buildings and depreciation of £14 million
(2019: £12 million) on the other assets.

The Group has commitments to purchase property, plant and equipment of £96 million (2019: £59 million).

11 Equity Instruments
2020 2019
£m £m

Equity investments – fair value other comprehensive income1 114 58

Investments in associates accounted for using the equity method 22 –
Total equity instruments 136 58

1. Equity investments is composed of £94 million representing 12% of the outstanding units in Pharmapacks LLC, £16 million representing less than 1% of the issued share capital of China
Pharmaceutical Resources Limited and £4 million of other equity investments

Investments accounted for using the equity method relates to the Group's investment in Your.MD AS, which has been accounted for as an associate
since August 2020. The Group has recognised a loss of £1 million within the Group Income Statement with respect to this investment. There are no
gains or losses recognised within other comprehensive income with respect to this investment.

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12 Deferred Tax
Accelerated Short-term Retirement
capital Intangible temporary benefit
allowances assets differences Tax losses obligations Total
Deferred tax £m £m £m £m £m £m

At 1 January 2020 (42) (3,710) 381 44 38 (3,289)

(Charged)/credited to the Income Statement (14) (78) 70 10 (13) (25)
Credited/(charged) to other comprehensive income – – (8) – 13 5
Exchange differences 1 22 (16) (2) – 5
At 31 December 2020 (55) (3,766) 427 52 38 (3,304)

Accelerated Short-term Retirement

capital Intangible temporary benefit
allowances assets differences Tax losses obligations Total
2020 £m £m £m £m £m £m

Deferred tax assets 4 (64) 244 48 26 258

Deferred tax liabilities (59) (3,702) 183 4 12 (3,562)
Deferred tax (55) (3,766) 427 52 38 (3,304)

Accelerated Short-term Retirement

capital Intangible temporary benefit
allowances assets differences Tax losses obligations Total
Deferred tax £m £m £m £m £m £m

At 1 January 2019 (24) (3,848) 409 24 29 (3,410)

(Charged)/credited to the Income Statement (19) 18 (19) 22 9 11
Credited/(charged) to other comprehensive income – – 1 – 2 3
Exchange differences 1 120 (10) (2) (2) 107
At 31 December 2019 (42) (3,710) 381 44 38 (3,289)

Accelerated Short-term Retirement

capital Intangible temporary benefit
allowances assets differences Tax losses obligations Total
2019 £m £m £m £m £m £m

Deferred tax assets – (35) 199 38 22 224

Deferred tax liabilities (42) (3,675) 182 6 16 (3,513)
Deferred tax (42) (3,710) 381 44 38 (3,289)

Deferred tax assets and liabilities have been offset where they relate to income taxes levied by the same taxation authority.

Certain deferred tax assets in respect of corporation tax losses and other temporary differences totalling £1,534 million (2019: £984 million) have not
been recognised at 31 December 2020 as the likelihood of future economic benefit is not sufficiently assured. These assets will be recognised if
utilisation of the losses and other temporary differences becomes sufficiently probable.

13 Inventories
2020 2019
£m £m

Raw materials and consumables 352 334

Work in progress 87 62
Finished goods and goods held for resale 1,153 918
Total inventories 1,592 1,314

The total cost of inventories recognised as an expense and included in cost of sales amounted to £5,309 million (2019: £4,818 million). This includes
inventory write-offs and losses of £187 million (2019: £166 million).

The Group inventory provision at 31 December 2020 was £119 million (2019: £93 million).

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14 Trade and Other Receivables

2020 2019
Amounts falling due within one year £m £m

Trade receivables 1,584 1,778

Less: Provision for impairment of receivables (27) (62)
Trade receivables – net 1,557 1,716
Other receivables 290 283
Prepayments and accrued income 74 80
Trade and other receivables 1,921 2,079

The carrying amounts of the Group’s trade and other receivables are denominated in the following currencies:
2020 20191
Currency analysis £m £m

US dollar 477 561

Euro 281 319
Sterling 155 121
China renminbi 137 84
Other currencies 871 994
Trade and other receivables 1,921 2,079

1. 2019 comparatives have been revised to reclassify £94 million of US dollar receivables to other currencies

The maximum exposure to credit risk at the year end is the carrying value of each class of receivable mentioned above.

a. Trade Receivables
Trade receivables consist of amounts due from customers. The Group’s customer base is large and diverse and consequently there is limited
concentration of credit risk. Credit risk is assessed at a subsidiary and Group level and takes into account the financial positions of customers, past
experience, future expectations and other relevant factors. Individual credit limits are established based on those factors.

The following table provides an ageing analysis of trade receivables at year end:
2020 2019
Ageing analysis £m £m

Not overdue 1,346 1,455

Up to 3 months overdue 193 259
Over 3 months overdue 45 64
Trade receivables 1,584 1,778

At 31 December 2020, a provision of £27 million (2019: £62 million) was recorded against certain trade receivables based on a forward-looking
assessment of the lifetime expected credit loss as required by IFRS 9. This assessment considered the ageing profiles of specific trade receivable
balances along with the risk of future customer defaults.

As at 31 December 2020, trade receivables of £211 million (2019: £261 million) were past due but not impaired. These receivables were not impaired
because having considered their nature and historical collection experience, recovery of the unprovided amounts is expected in due course.

b. Other Receivables
Other receivables includes recoverable indirect tax of £213 million (2019: £202 million). This contains £3 million (2019: £3 million) of impaired assets all
aged over three months from a broad range of countries within the Group.

c. Other Non-current Receivables

Other non-current receivables at 31 December 2020 of £146 million (2019: £155 million) includes non-current indirect tax, long-term prepayments, and
non-current derivatives of £19 million (2019: £nil)

d. Financial instruments (Note 15)

At 31 December 2020 £1,918 million (2019: £2,096 million) of the current and non-current receivables totalling £2,067 million (2019: £2,234 million) are
financial assets. These mainly related to amounts owed from customers or government bodies and are typically non-interest bearing. Amounts that
are not financial assets are mostly prepayments and employee benefit assets.

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15 Financial Instruments and Financial Risk Management

Financial Instruments by Category
Fair value
Derivatives through the
Amortised used for Income Equity Carrying
cost hedging Statement instruments value total
At 31 December 2020 Note £m £m £m £m £m

Assets as per the Balance Sheet

Current and non-current trade and other receivables 14d 1,918 – – – 1,918
Derivative financial instruments – FX forward exchange contracts – 24 6 – 30
Derivative financial instruments – Interest rate swaps 14c – 7 – – 7
Derivative financial instruments – Cross currency interest rate swaps 14c – 12 – – 12
Equity instruments – FVOCI 11 – – – 114 114
Cash and cash equivalents 1,646 – – – 1,646

Liabilities as per the Balance Sheet

Borrowings (commercial paper, bank loans & overdrafts)1 691 – – – 691
Lease obligations 313 – – – 313
Bonds 8,041 – – – 8,041
Senior notes 1,221 – – – 1,221
Term loans 291 – – – 291
Derivative financial instruments – FX forward exchange contracts – 50 68 – 118
Current and non-current trade and other payables 21 5,777 – – – 5,777

1. The categories in this disclosure are determined by IFRS 9. Borrowings largely relate to commercial paper. As at 31 December 2020, the Group had commercial paper in issue
amounting to €750 million (nominal values) at the rate of between negative 0.14% and negative 0.31% with maturities ranging from 5 January 2021 to 23 June 2021

Fair value
Derivatives through the
Amortised used for Income Equity Carrying
cost hedging Statement instruments value total
At 31 December 2019 Note £m £m £m £m £m

Assets as per the Balance Sheet

Current and non-current trade and other receivables 14d 2,096 – – – 2,096
Derivative financial instruments – FX forward exchange contracts – 26 4 – 30
Equity instruments – FVOCI 11 – – – 58 58
Cash and cash equivalents 1,549 – – – 1,549

Liabilities as per the Balance Sheet

Borrowings (commercial paper, bank loans & overdrafts)1 3,009 – – – 3,009
Lease obligations 325 – – – 325
Bonds 6,201 – – – 6,201
Senior notes 1,834 – – – 1,834
Term loans 826 – – – 826
Derivative financial instruments – FX forward exchange contracts – 28 109 – 137
Derivative financial instruments – Interest rate swaps – 1 – – 1
Current and non-current trade and other payables 21 4,861 – – – 4,861

1. The categories in this disclosure are determined by IFRS 9. Borrowings largely relate to commercial paper. Lease obligations are outside the scope of IFRS 9, but they remain within the
scope of IFRS 7, and therefore have been shown separately

The fair value measurement hierarchy levels have been defined as follows:
• Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).
• Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e.
derived from prices) (level 2). If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
• Inputs for the asset or liability that are not based on observable market data (i.e. unobservable inputs) (level 3).

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15 Financial Instruments and Financial Risk Management continued

The following table categorises the Group’s financial assets and liabilities held at fair value by the valuation methodology applied in determining their
fair value.
Level 1 Level 2 Level 3 Total
£m £m £m £m

At 31 December 2020
Assets as per the Balance Sheet
Derivative financial instruments – Interest rate swaps – 7 – 7
Derivative financial instruments – Cross currency interest rate swaps – 12 – 12
Derivative financial instruments – FX forward exchange contracts – 30 – 30
Equity instruments – FVOCI 16 – 98 114
Liabilities as per the Balance Sheet
Derivative financial instruments – FX forward exchange contracts – 118 – 118

Level 1 Level 2 Level 3 Total

£m £m £m £m

At 31 December 2019
Assets as per the Balance Sheet
Derivative financial instruments – FX forward exchange contracts – 30 – 30
Equity instruments – FVOCI 30 – 28 58
Liabilities as per the Balance Sheet
Derivative financial instruments – FX forward exchange contracts – 137 – 137
Derivative financial instruments – Interest rate swaps – 1 – 1

The fair value of forward foreign exchange contracts was determined using forward exchange rates derived from market sourced data at the
Balance Sheet date, with the resulting value discounted back to present value (level 2 classification). The fair value of equity instruments – FVOCI was
determined using both quoted share price information (level 1 classification) and other non-market information (level 3 classification).

The fair value of the interest rate swap contracts and the cross currency interest rate swaps was calculated using discounted future cash flows at
floating market rates (level 2 classification).

Except for the bonds and senior notes, the fair values of other financial assets and liabilities at amortised cost approximate their carrying values. The
fair value of the bonds as at 31 December 2020 is a liability of £8,562 million (2019: £6,325 million) and the fair value of the senior notes as at
31 December 2020 is a liability of £1,445 million (2019: £1,950 million). The fair value of the bonds and senior notes was derived using quoted market
rates in an active market (level 1 classification).

Offsetting financial assets and financial liabilities

The Group has forward foreign exchange contracts and cash that are subject to enforceable master netting arrangements. The following tables set
out the carrying amounts of the recognised financial instruments that are subject to these agreements.

(a) Financial assets

Gross
amounts of
recognised Net amounts
Gross financial of financial Financial
amounts of liabilities set assets instruments
recognised off in the presented in not set off in
financial Balance the Balance the Balance
assets Sheet Sheet Sheet Net amount
At 31 December 2020 £m £m £m £m £m

FX forward exchange contracts 30 – 30 (27) 3

Interest rate swaps 7 – 7 – 7
Cross currency interest rate swaps 12 – 12 – 12
Cash and cash equivalents 1,646 – 1,646 – 1,646
1,695 – 1,695 (27) 1,668

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Gross
amounts of Net amounts
Gross recognised of financial Financial
amounts of financial assets instruments
recognised liabilities set presented in not set off in
financial off in the the Balance the Balance Net
assets Balance Sheet Sheet Sheet amount
At 31 December 2019 £m £m £m £m £m

FX forward exchange contracts 30 – 30 (28) 2

Cash and cash equivalents 1,549 – 1,549 – 1,549
1,579 – 1,579 (28) 1,551

(b) Financial liabilities

Gross
amounts of
recognised Net amounts
Gross financial of financial Financial
amounts of assets set off liabilities instruments
recognised in the presented in not set off in
financial Balance the Balance the Balance Net
liabilities Sheet Sheet Sheet amount
As at 31 December 2020 £m £m £m £m £m

FX forward exchange contracts (118) – (118) 27 (91)

Bank overdrafts (2) – (2) – (2)
(120) – (120) 27 (93)

Gross
amounts of Net amounts
Gross recognised of financial Financial
amounts of financial liabilities instruments
recognised assets set off presented in not set off in
financial in the Balance the Balance the Balance Net
liabilities Sheet Sheet Sheet amount
As at 31 December 2019 £m £m £m £m £m

FX forward exchange contracts (137) – (137) 28 (109)

Interest rate swaps (1) – (1) – (1)
Bank overdrafts (2) – (2) – (2)
(140) – (140) 28 (112)

Financial Risk Management

The Group’s multinational operations expose it to a variety of financial risks that include the effects of changes in foreign currency exchange rates
(foreign exchange risk), market prices, interest rates, credit risks and liquidity. The Group has in place a risk management programme that uses foreign
currency financial instruments, including debt, and other instruments, to limit the impact of these risks on the financial performance of the Group.

The Group’s financing and financial risk management activities are centralised into Group Treasury (GT) to achieve benefits of scale and control. GT
manages financial exposures of the Group centrally in a manner consistent with underlying business risks. GT manages only those risks and flows
generated by the underlying commercial operations; speculative transactions are not undertaken.

The Board of Directors reviews and agrees policies, guidelines and authority levels for all areas of Treasury activity and individually approves
significant activities. GT operates under the close control of the CFO and is subject to periodic independent reviews and audits, both internal
and external.

1. Market Risk
(a) Currency risk
The Group operates internationally and enters into transactions in many currencies and as such is exposed to foreign exchange risk arising from
various currency exposures. Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities and net investments in
foreign operations.

The Group’s policy is to align interest costs and operating profit of its major currencies in order to provide some protection against the translation
exposure on foreign currency profits after tax. The Group may undertake borrowings and other hedging methods in the currencies of the countries
where most of its assets are located.

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It is the Group’s policy to monitor and only where appropriate hedge its foreign currency transaction exposure. These transaction exposures arise
mainly from foreign currency receipts and payments for goods and services and from the remittances of foreign currency dividends and loans.
Where the Group enters into hedges and applies hedge accounting, hedges are documented and tested for effectiveness on an ongoing basis with
any ineffectiveness recorded in the Income Statement.

The local business units enter into forward foreign exchange contracts with GT to manage these exposures where practical and allowed by local
regulations. GT matches the Group exposures, and hedges the position where possible, using spot and forward foreign currency exchange contracts.

The Group’s strategy is to minimise Income Statement volatility by monitoring foreign currency balances, external financing, and external hedging
arrangements. The Group’s hedging profile is regularly reviewed to ensure it is appropriate and to mitigate these risks as far as possible.

The notional principal amount of the outstanding forward foreign exchange contracts at 31 December 2020 was £6,234 million payable (2019: £6,190
million payable).

The Group held forward foreign exchange contracts designated as cash flow hedges primarily in Euro, US dollar, Sterling, Chinese renminbi, Australian
dollar, Canadian dollar and Thai baht. The notional value of the payable leg resulting from these financial instruments was as follows:
2020 2019
Cash Flow Hedge Profile £m £m

Euro 444 415

US dollar 438 396
Sterling 423 451
Chinese renminbi 176 112
Australian dollar 92 81
Canadian dollar 84 75
Thai baht 74 20
Other 557 620
2,288 2,170

These forward foreign exchange contracts are expected to mature over the period January 2021 to December 2021 (2019: January 2020 to
December 2020).

Cash flow hedging is applied with the economic relationship and expected effectiveness being assessed at inception, with any ineffectiveness
recognised in the Income Statement. The ineffective portion recognised in the Income Statement arising from cash flow hedges is immaterial
(2019: immaterial).

Gains and losses recognised in other comprehensive income and the hedging reserve on forward exchange contracts in 2020 of £17 million loss
(2019: £9 million loss) are recognised in the Income Statement in the periods in which the hedged forecast transaction affects the Income Statement.

At 31 December 2020, the Group had forward contracts used for cash flow hedging with total fair value of £26 million liability (2019: £6 million liability).
These contracts are denominated in a diverse range of currency pairings, where a fluctuation of 5% in any one of the contract pairings, with all others
remaining constant, would have a maximum effect of £8 million (2019: £9 million) on Shareholder Equity, until the point at which the contracts mature
and the forecast transaction occurs. The four largest contract pairings in order of nominal value were Euro/Polish zloty, US dollar/Sterling, US dollar/
Chinese renminbi and Euro/Sterling.

Where the Group is exposed to currency risk on its borrowings, the Group seeks to minimise the impact of foreign exchange on the Income
Statement through placing debt within a net investment hedge or using financial instruments.

As at 31 December 2020, the Group had designated a 2023 US dollar bond totalling $500 million (2019: $500 million), 2030 Euro bond totalling €850
million (2019: nil) and Euro commercial paper totalling €750 million (2019: €1,472 million) as the hedging instruments in a net investment hedge
relationship. Possible sources of ineffectiveness include any impairments to the Group’s net investments in Euros. The hedges are documented and
are assessed for effectiveness on an ongoing basis.

The net gain or loss under these arrangements is recognised in other comprehensive income. The net effect on other comprehensive income for the
year ended 31 December 2020 was a £75 million loss (2019: £70 million gain). If Sterling weakens by 5% against the US dollar and Euro, the maximum
impact on shareholders’ equity due to the net investment hedging on US dollar bond and Euro commercial paper/bond would be £19 million and £75
million respectively.

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15 Financial Instruments and Financial Risk Management continued

During the year, the Group issued a €850 million bond due in 2026, and concurrent with the issue of the bond, the Group entered into a €850 million
cross currency interest rate swap on similar terms to the 2026 bond to mitigate foreign exchange currency risk, for which hedge accounting has
been applied. Sources of ineffectiveness on this hedge relationship will come from difference in credit ratings between the counterparties and
modifications to the terms of either hedged item or instrument. At 31 December 2020 no ineffectiveness has been charged to the Income
Statement as it is not material. The interest rate element of the swap is discussed in interest rate risk below.

The remaining major monetary financial instruments (liquid assets, receivables, interest and non-interest bearing liabilities) are directly denominated
in the functional currency of the Group or are transferred to the functional currency of the local entity through the use of derivatives.

The gains and losses from fair value movements on derivatives held at fair value through the Income Statement, recognised in the Income Statement
in 2020, was a £2 million loss (2019: £158 million loss).

(b) Price risk

Due to the nature of its business the Group is exposed to commodity price risk related to the production or packaging of finished goods, such as oil
related, and a diverse range of other, raw materials. This risk is, however, managed primarily through medium-term contracts with certain key
suppliers and is not therefore viewed as being a material risk.

(c) Interest rate risk

The Group has both interest-bearing and non-interest bearing assets and liabilities. The Group monitors its interest income and expense rate
exposure on a regular basis. The Group sets its desired level of fixed and floating rate exposure as part of its interest risk management strategy. The
mix of fixed and floating exposure on interest-bearing assets is managed by using a mixture of fixed and floating rate deposits. The fixed/floating mix
on liabilities is managed by using a mixture of fixed and floating rate borrowings as well as by using derivatives to swap fixed to floating rate.

During the year, the Group issued two €850 million bonds due in 2026 and 2030 and one £500 million bond due in 2032. In order to maintain a level of
floating rate debt in line with the Group’s interest management strategy the Group entered into a €850 million cross currency interest rate swap on
similar terms to the 2026 bond and interest rate swap on the coupon payments due on the 2030 bond. The accounting for the foreign exchange
element of the cross currency swap is described above. The interest rate element swaps the fixed coupon payments on the bond for floating rate.
The interest rate swaps have been placed into a fair value hedge relationship with the related bonds. Sources of ineffectiveness on this hedge
relationship will come from a difference in credit ratings between the counterparties and modifications to the terms of either the hedged item or the
hedging instrument. At 31 December 2020 no ineffectiveness has been recognised in the Income Statement as the effect is not material.

During the year, the Group repaid a $750 million senior note and made the final payment on an interest rate swap that had been designated as a fair
value hedge against the senior note.

Various scenarios are simulated taking into consideration refinancing, renewal of existing positions, alternative financing and hedging. Based on these
scenarios, the Group calculates the impact on the Income Statement of a defined interest rate shift. For each simulation, the same interest rate shift is
used for all currencies, calculated on a full-year and pre-tax basis.

The scenarios are only run for liabilities that represent the major interest-bearing positions. Based on the simulations performed, the impact on the
Income Statement of a 50 basis-point shift in interest rates would be a maximum increase of £14 million (2019: £25 million) or decrease of £14 million
(2019: £25 million), respectively for the liabilities covered. The simulation is done on a periodic basis to verify that the maximum loss simulated is within
the limit given by management.

2. Credit Risk
The Group has no significant concentrations of credit risk. Credit risk arises from cash and cash equivalents, derivative financial instruments, deposits
with banks and financial institutions, as well as credit exposures to customers. The assessment of lifetime expected credit losses relating to trade
and other receivables is detailed in Note 14. Financial institution counterparties are subject to approval under the Group’s counterparty risk policy and
such approval is limited to financial institutions with a BBB rating or above. The Group uses BBB and higher rated counterparties to manage risk and
only uses sub BBB rated counterparties by exception. The amount of exposure to any individual counterparty is subject to a limit defined within the
counterparty risk policy, which is reassessed annually by the Board of Directors. Derivative financial instruments are only traded with counterparties
approved in accordance with the approved policy. Derivative risk is measured using a risk weighting method.

The Group has counterparty risk from asset positions held with financial institutions. This is comprised of short-term investments, cash and cash
equivalents and derivatives positions as stated on the face of the Balance Sheet. For risk management purposes the Group assesses the exposure
to major financial institutions by looking at the deposits, cash and cash equivalents and 5% of derivative notional position. The following table
summarises the Group’s assessment of its exposure. The financial institutions listed in the tables are not comparable year on year.

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15 Financial Instruments and Financial Risk Management continued

2020
Limit Exposure
Counterparty Credit rating £m £m

Financial institution A AAA 300 201

Financial institution B A+ 150 141
Financial institution C A+ 150 130
Financial institution D AAA 300 125
Financial institution E A 125 121
Financial institution F A+ 143 102
Financial institution G A+ 100 96
Financial institution H A 103 93
Financial institution I A 116 93
Financial institution J AAA 300 85

2019
Limit Exposure
Counterparty Credit rating £m £m

Financial institution A AAA 300 211

Financial institution B AA- 200 193
Financial institution C A+ 150 137
Financial institution D A 125 109
Financial institution E A+ 146 101
Financial institution F A 125 100
Financial institution G A 116 90
Financial institution H A 125 86
Financial institution I A 125 84
Financial institution J A 125 82

3. Liquidity Risk
Liquidity risk is the risk that the Group cannot repay financial liabilities as and when they fall due. The Group’s liquidity risk is concentrated towards
commercial paper, bond, term loan and senior note principal repayments due between 2021 and 2044.

The Group has various borrowing facilities available to it. The Group has bilateral credit facilities with high-quality international banks and has a
financial covenant, which is not expected to restrict the Group’s future operations.

At the end of 2020, the Group had long-term debt excluding lease liabilities of £9,553 million (2019: £8,292 million), of which £6,889 million (2019:
£8,292 million) is repayable in more than two years. In addition, the Group has committed borrowing facilities totalling £5,500 million (2019: £5,500
million), of which £3,500 million (2019: £5,500 million) expires after more than two years. These facilities were undrawn at year end. The committed
borrowing facilities (both drawn and undrawn), together with central cash and investments, are considered sufficient to meet the Group’s projected
cash requirements.

All borrowing facilities are at floating rates of interest.

The facilities have been arranged to cover general corporate purposes, including support for commercial paper issuance. All facilities incur
commitment fees at market rates.

The Group’s borrowing limit at 31 December 2020 calculated in accordance with the Articles of Association was £27,345 million (2019: £28,089 million).

The table on the next page analyses the Group’s financial liabilities and the derivatives which will be settled on a net basis into relevant maturity
groupings based on the remaining period at the Balance Sheet date to the contractual maturity date. The amounts disclosed in the table are the
contractual undiscounted cash flows which have been calculated using spot rates at the relevant Balance Sheet date, including interest to be paid.

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15 Financial Instruments and Financial Risk Management continued

Less than Between Between Over
Total 1 year 1 and 2 years 2 and 5 years 5 years
At 31 December 2020 £m £m £m £m £m

Commercial paper (671) (671) – – –

Bonds (8,843) (174) (2,527) (2,119) (4,023)
Term loans (297) (3) (294) – –
Senior notes (1,888) (52) (52) (706) (1,078)
Interest rate swaps 24 2 2 7 13
Trade payables (2,159) (2,159) – – –
Other payables (3,643) (3,418) (53) (172) –

Less than Between Between Over

Total 1 year 1 and 2 years 2 and 5 years 5 years
At 31 December 2019 £m £m £m £m £m

Commercial paper (3,013) (3,013) – – –

Bonds (7,049) (176) (176) (4,670) (2,027)
Term loans (881) (21) (21) (839) –
Senior notes (2,584) (637) (54) (162) (1,731)
Interest rate swaps (1) (1) – – –
Trade payables (1,796) (1,796) – – –
Other payables (3,087) (2,875) (55) (135) (22)

The table below analyses the Group’s derivative financial instruments which will be settled on a gross basis into relevant maturity groupings based on
the remaining period between the Balance Sheet date and the contractual maturity date. The amounts disclosed in the table are the contractual
undiscounted cash flows which have been calculated using spot rates at the relevant Balance Sheet date.

Less than Between Between Over

1 year 1 and 2 years 2 and 5 years 5 years
At 31 December 2020 £m £m £m £m

FX forward exchange contracts

Outflow (6,234) – – –
Inflow 6,146 – – –
Cross currency interest rate swap
Outflow (9) (9) (26) (785)
Inflow 3 3 8 773

Less than Between Between Over

1 year 1 and 2 years 2 and 5 years 5 years
At 31 December 2019 £m £m £m £m

FX forward exchange contracts

Outflow (6,190) – – –
Inflow 6,084 – – –

Cash flow forecasting is performed by the local business units and on an aggregated basis by GT. GT monitors rolling forecasts of the Group’s liquidity
requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing
facilities. Funds over and above those required for short-term working capital purposes by the local businesses are generally remitted to GT. The
Group uses the remittances to settle obligations, repay borrowings, or, in the event of a surplus, invest in short‑term instruments issued by institutions
with a BBB rating or better.

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15 Financial Instruments and Financial Risk Management continued

4. Capital Management
The Group considers capital to be net debt plus total equity. Net debt is calculated as total financing liabilities less cash and cash equivalents and
short-term deposits. Total equity includes share capital, reserves and retained earnings as shown in the Group Balance Sheet.

2020 2019
Note £m £m

Cash and cash equivalents including overdrafts 1,644 1,547

Financing liabilities 17 (10,598) (12,298)
Net debt 8,954 10,751
Total equity 9,159 9,407
18,113 20,158

The objectives for managing capital are to safeguard the Group’s ability to continue as a going concern, in order to provide returns for shareholders
and benefits for other stakeholders and to maintain an efficient capital structure to optimise the cost of capital.

In 2020, the Group provided returns to shareholders in the form of dividends. Refer to Note 28 for further details.

The Group monitors net debt and at year end the Group had net debt of £8,954 million (2019: £10,749 million). The Group seeks to pay down net debt
using cash generated by the business to maintain an appropriate level of financial flexibility.

The Group participates in a supply chain finance programme (SCF) under which certain suppliers to the Group are able to access a Supply Chain
Financing arrangement that enables them to fund their working capital. The principal purpose of this programme is to facilitate efficient payment
processing and enable the willing suppliers to sell their receivables due from the Group to a bank before their due date. The Group does not incur any
additional interest towards the bank on the amounts due to the suppliers. As part of this facility the Group has confirmed to certain financial
institutions that it will make payments of £392 million (2019: £351 million) to these suppliers as they fall due. These amounts are recorded within Trade
Payables on the Balance Sheet and all cash flows associated with the programme are included within operating cash flows as they continue to be
part of the normal operating cycle of the Group and their principal nature remains operating – i.e. payments for the purchase of goods and services.

16 Cash and Cash Equivalents

2020 2019
£m £m

Cash at bank and in hand 499 543

Short-term bank deposits 1,147 1,006
Cash and cash equivalents 1,646 1,549

The Group operates in a number of territories where there are either foreign currency exchange restrictions, or where it is difficult for the Group to
extract cash readily and easily in the short term. As a result, £136 million (2019: £130 million, restated) of cash included in cash and cash equivalents is
restricted for use by the Group, yet available for use in the relevant subsidiary’s day-to-day operations.

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17 Financial Liabilities – Borrowings

2020 2019
Current Note £m £m

Bank loans and overdrafts1 20 16

Commercial paper2 671 2,993
Senior notes – 569
Lease liabilities 19 72 72
Total short-term borrowings 763 3,650
Bonds 8,041 6,201
Senior notes 1,221 1,265
Term loans 291 826
Lease liabilities 19 241 253
Total long-term borrowings 9,794 8,545
Total borrowings 10,557 12,195
Derivative financial instruments 43 105
Less overdrafts presented in cash and cash equivalents in the cash flow statement 15 (2) (2)
Total financing liabilities 10,598 12,298

1. Bank loans are denominated in a number of currencies: all are unsecured and bear interest based on the relevant LIBOR equivalent
2. Commercial paper was issued in US dollars and Euros, is unsecured and bears interest based on the relevant LIBOR equivalent

The Group uses derivative financial instruments to hedge certain elements of interest rate and exchange risk on its financing liabilities. The split
between these items and other derivatives on the Balance Sheet is shown below:
Assets Liabilities
2020 (£m) Current Non-Current1 Current Non-Current

Derivative financial instruments (financing liabilities) 6 19 (68) –

Derivative financial instruments (non-financing liabilities) 24 – (50) –
At 31 December 2020 30 19 (118) –

1. Included within other non-current receivables on the Balance Sheet

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17 Financial Liabilities – Borrowings continued

Assets Liabilities
2019 (£m) Current Non-Current Current Non-Current

Derivative financial instruments (financing liabilities) 4 – (109) –

Derivative financial instruments (non-financing liabilities) 26 – (29) –
At 31 December 2019 30 – (138) –

2020 2019
Reconciliation of movement in financing liabilities to cash flow statement £m £m

At 1 January 12,298 12,223

Proceeds from borrowings 2,903 1,548
Repayment of borrowings (4,583) (1,122)
Other financing cash flows (47) (75)
New lease liabilities 86 63
Exchange, fair value and other movements (59) (339)
At 31 December 10,598 12,298

2020 2019
Maturity of borrowings (excluding lease liabilities) £m £m

Bank loans and overdrafts repayable:

Within one year or on demand 20 16
Other borrowings repayable:
Within one year:
Commercial paper 671 2,993
Senior notes – 569
After one year and in less than five years:
Bonds 4,194 4,326
Senior notes 569 –
Term loans 291 826
After five years or longer:
Bonds 3,847 1,875
Senior notes 652 1,265
10,224 11,854
Gross borrowings (unsecured) 10,244 11,870

18 Provisions for Liabilities and Charges

Legal Restructuring Other Total
provisions provisions provisions provisions
£m £m £m £m

At 1 January 2019 461 52 98 611

Charged to the Income Statement 82 19 24 125
Utilised during the year (381) (45) (14) (440)
Released to the Income Statement (7) (14) (35) (56)
Exchange adjustments (4) – (2) (6)
At 31 December 2019 151 12 71 234
Charged to the Income Statement 160 – 19 179
Utilised during the year (13) (7) (6) (26)
Released to the Income Statement (61) – (27) (88)
Reclassifications (2) – 2 –
Exchange adjustments (3) – (4) (7)
At 31 December 2020 232 5 55 292

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18 Provisions for Liabilities and Charges continued

Provisions have been analysed between current and non-current as follows:
2020 2019
£m £m

Current 243 178

Non-current 49 56
292 234

Provisions are recognised when the Group has a present or constructive obligation as a result of past events, it is more likely than not that there will
be an outflow of resources to settle that obligation, and the amount can be reliably estimated.

As at 31 December 2020, the Group recognised legal provisions of £232 million (2019: £151 million) in relation to a number of historical regulatory and
other matters in various jurisdictions.

Other provisions include environmental and other obligations throughout the Group, the majority of which are expected to be utilised within five years.

19 Lease Liabilities
2020 2019
Maturity analysis – contractual undiscounted cash flows £m £m

Within one year 86 85

Later than one and less than five years 176 184
After five years 122 114
Total undiscounted lease liabilities at 31 December 384 383
Lease liabilities included in the statement of financial position at 31 December 313 325
Current 72 72
Non-current 241 253

1. Interest on lease liabilities amounted to £13 million (2019: £13 million)

20 Contingent Liabilities and Assets

The Humidifier Sanitiser (HS) issue in South Korea was a tragic event. The Group continues to make both public and personal apologies to the victims
who have suffered lung injury as a result of the Oxy HS product and the role that the Oxy HS product played in the issue.

As previously reported, over the last several years the South Korean government has designated a number of diseases as HS injuries, in addition to the
HS lung injury for which RB Korea’s (RBK) compensation plan was established. These include asthma, toxic hepatitis, child interstitial lung disease,
bronchitis and upper airway disease. Detailed data underpinning recognition of these diseases has not been disclosed nor has detailed recognition
criteria.

The Korean National Assembly passed a bill on 6 March 2020 to amend the HS law. The amendment became effective on 25 September 2020. The
main changes in the amendment relate to: (i) the definition of HS injury (removing the requirement for “substantial causation” with HS exposure); (ii)
the legal presumption of causation (shifting the burden of proof for causation to the defendant if the plaintiff demonstrates “epidemiological
correlation” between HS exposure and their injury), and (iii) amendments to the fund set up by the government and funded by the government and
HS companies (the Special Relief Fund (SRF), now called the Injury Relief Fund (IRF)) to provide expanded support payments to HS victims (which
would cover all elements of court awarded damages except mental distress, aside from KRW 100 million consolation payments for death cases, and
partial lost income). The government can also impose on HS manufacturers an additional levy for the IRF of up to the amount previously collected for
the SRF.

Further, under the amended HS law, HS victims will no longer be classified as Categories 1 to 5 based on the likelihood that HS exposure caused their
lung injury. As RBK’s compensation plan was dependent on the previous classification system, it will no longer be possible for the compensation plan
to operate and it is now being closed.

The pending civil actions filed by HS claimants against RBK will also be impacted by the amended HS law, e.g. due to the lowered causation standard
of “epidemiological correlation”. Thus, we expect the number of civil claimants to increase, primarily seeking awards for mental distress and lost
income (for portions not already covered by the IRF).

The Group currently has a provision of £83 million (2019: £26 million) in relation to the HS issue in South Korea. In addition, there are further potential
costs that either are not considered probable or cannot be reliably estimated at the current time. The impact of the HS law amendments will require
further monitoring and analysis, in particular those which will be subject to court interpretation, such as the new epidemiological correlation standard,
any limitation applied by courts to damage awards and the interest rate applied by individual courts to damage awards and external factors such as
the rate of future IRF applications/recognitions. Accordingly, it is not possible to make any reliable estimate of liability for individuals recognised by the
government as having HS injuries.

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RBK is reliant on the Group to provide funding to meet its HS liabilities, which to date the Group has been willing to do.

Other
From time to time, the Group is involved in discussions in relation to ongoing tax matters in a number of jurisdictions around the world. Where
appropriate, the Directors make provisions based on their assessment of each case. See Note 7.

21 Trade and Other Payables

2020 2019
£m £m

Trade payables 2,159 1,796

Other payables 92 115
Other tax and social security payable 164 133
Accruals 3,327 2,776
Trade and other payables 5,742 4,820

Included within accruals is £1,275 million (2019: £1,095 million) in respect of amounts payable to trade customers and government bodies for trade
spend.

Other Non-current Liabilities

2020 2019
£m £m

Financial liability in respect of put option to non-controlling interest1 148 135

Interest accrued on tax balances 157 154
US employee related payables 39 38
Other 53 40
Other non-current liabilities 397 367

1. This liability is in respect of the present value of the expected redemption amount of a written put option granted to the non‑controlling interest as described in Note 27. The
amortised cost of the liability is subject to estimation of the future performance of certain Group products. Future changes in estimation would result in the remeasurement of the
liability through the Income Statement

Financial Instruments (Note 15)

At 31 December 2020 £5,777 million (2019: £4,861 million) of the current and non-current payables totalling £6,139 million (2019: £5,187 million) are
financial liabilities. These mainly related to amounts owed to suppliers in respect of goods or services and are typically non-interest bearing. Amounts
that are not financial instruments comprise of employee related liabilities, social security liabilities and accrued interest.

22 Current and Non-current Tax Liabilities

2020 2019
£m £m

Current tax liabilities 72 145

Non-current tax liabilities 1,021 969
Total current and non-current tax liabilities 1,093 1,114

Included in Total current and non-current tax liabilities is an amount of £950 million (2019: £891 million) relating to tax contingencies primarily arising in
relation to transfer pricing.

Certain tax positions taken by us are based on industry practice, tax advice and drawing similarities from our facts and circumstances to those in case
law. In particular, international transfer pricing is an area of taxation that depends heavily on the underlying facts and circumstances and generally
involves a significant degree of judgement. Tax assets and liabilities are offset where there is a legally enforceable right to do so.

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23 Pension and Post-Retirement Commitments

Plan Details
The Group operates a number of defined benefit and defined contribution pension plans around the world covering many of its employees, which
are principally funded. The Group’s most significant pension plan (UK) is set up under Trust and is a separate entity from the Group. It has two
sections, a defined contribution section which remains open and a defined benefits section, which closed to new entrants in 2005 and following
consultation was closed to further accrual from 31 December 2017. Trustees of the plan are appointed by the Group, active members and pensioner
membership, and are responsible for the governance of the plan, including paying all administrative costs and compliance with regulations. The
defined benefit section of the plan is funded by the payment of contributions as required, following each Triennial Valuation.

The Group also operates a number of other post-retirement plans in certain countries. The two major plans are the US Retiree Health Care Plan and
the Mead Johnson & Company, LLC Medical Plan (together, the US (Medical) plans). In the US Retiree Health Care Plan, salaried participants become
eligible for retiree healthcare benefits after they reach a combined ‘age and years of service rendered’ figure of 70, although the age must be a
minimum of 55. This plan closed to new members in 2009. In the Mead Johnson & Company, LLC Medical Plan, acquired as part of the acquisition of
MJN on 15 June 2017, participants become eligible for retiree healthcare benefits if they leave employment after the age of 65, leave after the age of
55 and have completed ten years of service, or have their employment involuntarily terminated after the age of 55. A Benefits Committee is
appointed by the Group for both of these plans, responsible for the governance of the US plans, including paying all administrative costs and
compliance with regulations. Both of these plans are unfunded.

For the principal UK plan, a full independent actuarial valuation is carried out on a triennial basis. The most recent valuation was carried out at 5 April
2019. The Group has agreed that it will aim to eliminate the pension plan technical provisions deficit in the UK by the end of 2020. Funding levels are
monitored on an annual basis and the current agreed annual deficit reduction contributions are £6 million per annum. It is expected that contributions
to the UK defined benefit plan in 2021 will be £nil (2020: £6 million).

During 2020, a UK High Court ruling clarified the requirement to equalise the Guaranteed Minimum Pension element of benefits for men and women
who had transferred out their benefits from the Contracted Out UK Defined Benefits schemes, where those transfers contained benefits arising from
Guaranteed Minimum Pension accrued from post 17 May 1990 pensionable service . This is likely to lead to a small level of benefits in some
circumstances for those transferred members. As no allowance had previously been made, accordingly in 2020, a past service cost was charged of
£1 million reflecting the best estimate of the likely additional benefits that will be due to members. The final amount will be subject to agreement of
the relevant pension trustees.

For the US Retiree Health Care Plan, a full independent actuarial valuation is carried out on an annual basis. The most recent valuation was carried out
on 1 January 2020. For the Mead Johnson & Company, LLC Medical Plan, the most recent valuation was carried out at 1 January 2020. For both of these
plans, funding levels are monitored on an annual basis with contributions made equal to the claims made each year. It is expected that the combined
contributions in 2021 will be £7 million (2020: £7 million).

For the purpose of IAS 19, the projected unit valuation method was used for the UK and US plans, as per the principal UK plan triennial valuation results
(at 5 April 2019) and the US Medical plan valuations to 31 December 2020. The UK plans have a weighted average duration of the deferred benefit
obligation of 17.0 years (2019: 17.0 years).

Significant Actuarial Assumptions

The significant actuarial assumptions used in determining the Group’s net liability for the UK and US (Medical) plans as at 31 December were:

2020 2019
UK US (Medical) UK US (Medical)
% % % %

Rate of increase in pensionable salaries 5.1 – 5.2 –

Rate of increase in deferred pensions during deferment 3.1 – 3.1 –
Rate of increase in pension payments 2.9 – 3.0 –
Discount rate 1.5 2.3 1.9 3.1
Inflation assumption – RPI 3.1 – 3.2 –
Annual medical cost inflation – 5.0-8.5 – 4.5-8.2

For 31 December 2020, the Group revisited the corporate bonds used within the model used to determine the appropriate discount rate for the UK
scheme liabilities. The changes applied included removing from the model those bonds that have implicit government guarantee (for example,
universities). Had these changes been applied at 31 December 2019, then the impact would have been to increase the discount rate by around 0.3%
and reduce the defined benefit obligation by around £80 million. As this is a change in estimate, the 2019 amounts have not been restated.

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Assumptions regarding future mortality experience are set in accordance with published statistics and experience in each territory. The expected
lifetime of a participant aged 60 and the expected lifetime of a participant who will be aged 60 in 15 years (20 years in the US) are detailed below:

2020 2019
UK years US years UK years US years

Number of years a current pensioner is expected to live beyond 60:

Male 27.5 25.3 27.4 24.9
Female 28.7 27.3 28.6 27.1
Number of years a future pensioner is expected to live beyond 60:
Male 28.8 27.0 28.7 26.7
Female 30.0 28.9 30.0 28.8

For the principal UK plan, the mortality assumptions were based on the standard SAPS mortality table 3NMA for males (scaled by 98%) and table 3NFA
for females (scaled by 117%). Allowance for future changes is made by adopting the 2019 edition of the CMI series with a long-term improvement
trend of 1.5% per annum from 2013 onwards. For the US plan the mortality assumptions were determined using the Pri-2012. Total Dataset and
projected with Mortality Improvement Scale MP-2020.

Amounts Recognised on the Balance Sheet

The amounts recognised on the Balance Sheet are as follows:
2020 2019
£m £m

Balance Sheet liability for:

US (Medical) (125) (130)
Other (247) (221)
Liability on Balance Sheet (372) (351)
Balance Sheet assets for:
UK 188 217
Other 38 51
Asset on Balance Sheet 226 268
Net pension liability (146) (83)

The funded and unfunded amounts recognised on the Balance Sheet are determined as follows:
2020 2019
UK US (Medical) Other Total UK US (Medical) Other Total
£m £m £m £m £m £m £m £m

Present value of funded obligations (1,547) – (538) (2,085) (1,506) – (514) (2,020)
Fair value of plan assets 1,754 – 510 2,264 1,741 – 534 2,275
Surplus/(liability) of funded plans 207 – (28) 179 235 – 20 255
Present value of unfunded obligations – (125) (181) (306) – (130) (190) (320)
Irrecoverable surplus (19) – – (19) (18) – – (18)
Net pension surplus/(liability) 188 (125) (209) (146) 217 (130) (170) (83)

Group plan assets are comprised as follows:

2020 2019
UK US (Medical) Other Total UK US (Medical) Other Total
£m £m £m £m £m £m £m £m

Equities 182 – 217 399 205 – 227 432

Government bonds 682 – 137 819 1,020 – 137 1,157
Corporate bonds 395 – 92 487 369 – 101 470
Real Estate/property – unquoted 110 – 51 161 127 – 61 188
Other assets – unquoted 385 – 13 398 20 – 8 28
Fair value of plan assets 1,754 – 510 2,264 1,741 – 534 2,275

Included in Other assets is £350 million (2019: £nil) relating to an insurance buy-in asset.

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23 Pension and Post-Retirement Commitments continued

The present value of obligations for the principal UK plan and the US Medical plans at last valuation date is attributable to participants as follows:

2020 2019
UK US (Medical) UK US (Medical)
£m £m £m £m

Active participants – (50) – (47)

Participants with deferred benefits (687) (2) (650) (2)
Participants receiving benefits (860) (73) (856) (81)
Present value of obligation (1,547) (125) (1,506) (130)

The movement in the Group’s net deficit is as follows:

Present value of obligation Fair value of plan assets

US US
UK (Medical) Other Total UK (Medical) Other Total
£m £m £m £m £m £m £m £m

At 1 January 2019 1,472 126 662 2,260 (1,628) – (523) (2,151)

Current service cost 2 2 10 14 – – – –
Interest expense/(income) 39 5 20 64 (43) – (18) (61)
41 7 30 78 (43) – (18) (61)
Remeasurements:
Return on plan assets, excluding amounts included in interest
income – – – – (132) – (45) (177)
Gain from changes in demographic assumptions (51) (2) (1) (54) – – – –
Losses from change in financial assumptions 157 17 69 243 – – – –
Experience (gains)/losses (26) (5) 7 (24) – – – –
80 10 75 165 (132) – (45) (177)
Exchange differences – (6) (23) (29) – – 16 16
Contributions – employers – – – – (25) (7) (4) (36)
Payments from plans:
Benefit payments (87) (7) (40) (134) 87 7 40 134
As at 31 December 2019 1,506 130 704 2,340 (1,741) – (534) (2,275)

Current service cost 4 1 4 9 – – – –

Interest expense/(income) 28 4 14 46 (32) – (15) (47)

32 5 18 55 (32) – (15) (47)

Remeasurements:
Return on plan assets, excluding amounts included in interest
income – – – – (54) – (17) (71)
Losses/(gains) from changes in demographic assumptions 9 (1) (2) 6 – – – –
Losses from change in financial assumptions 88 12 55 155 – – – –
Experience (gains)/losses (9) (10) 3 (16) – – – –
88 1 56 145 (54) – (17) (71)
Exchange differences – (4) (15) (19) – – 20 20
Contributions – employers – – – – (6) (7) (8) (21)
Payments from plans:
Benefit payments (79) (7) (44) (130) 79 7 44 130
As at 31 December 2020 1,547 125 719 2,391 (1,754) – (510) (2,264)

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Amounts Recognised in the Income Statement
The charge for the year ended 31 December is shown below:
2020 2019
£m £m

Defined contribution plans 45 46

Defined benefit plans (net charge excluding interest)
UK 4 2
US (Medical) 1 2
Other 4 10
Total pension costs included in operating profit (Note 5)1 54 60
Income Statement charge included in finance expense – 3
Income Statement charge included in profit before income tax 54 63
Remeasurement losses/(gains) for : 2

UK 34 (52)
US (Medical) 1 10
Other 39 30
74 (12)

1. The Income Statement charge recognised in operating profit includes current service cost and past service cost
2. Remeasurement losses/(gains) excludes £1 million (2019: £nil) recognised in OCI for irrecoverable surplus

Sensitivity of Significant Actuarial Assumptions

The sensitivity of the UK defined benefit obligation to changes in the principal assumptions is shown below:

2020 Change in assumption Change in defined benefit obligation

Discount rate Increase 0.1% Decrease by 1.7%

RPI increase Increase 0.1% Increase by 1.0%
Life expectancy Members live 1 year longer Increase by 4.0%

2019 Change in assumption Change in defined benefit obligation

Discount rate Increase 0.1% Decrease by 1.7%

RPI increase Increase 0.1% Increase by 1.0%
Life expectancy Members live 1 year longer Increase by 4.0%

The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to
occur, and changes in some of the assumptions may be correlated.

Impact of Medical Cost Trend Rates

A 1% change in the assumed healthcare cost trend rates would have an immaterial impact on the service cost, interest cost and post-retirement
benefit obligation.

Risk and Risk Management

Through its defined benefit pension plans and post-employment medical plans, the Group is exposed to a number of risks, the most significant of
which are detailed as follows:

Asset Volatility: The plan liabilities are calculated using a discount rate set with reference to corporate bond yields. If plan assets underperform this
yield, this will create a deficit. Both the UK and US plans hold a significant proportion of equities, which are expected to outperform corporate bonds
in the long term while providing volatility and risk in the short term. However, the Group believes that due to the long-term nature of the plan liabilities
and the strength of the supporting group, a level of continuing equity investment is an appropriate element of the Group’s long-term strategy to
manage the plans efficiently.

Changes in Bond Yields: A decrease in government and corporate bond yields will increase plan liabilities, although this will be partially offset by an
increase in the value of the plans’ bond holdings.

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23 Pension and Post-Retirement Commitments continued

Inflation Risk: Some of the Group’s pension obligations are linked to inflation, and higher inflation will lead to higher liabilities (although, in most cases,
caps on the level of inflationary increases are in place to protect the plan against extreme inflation). The majority of the plans’ assets are either
unaffected by (fixed interest bonds) or loosely correlated with (equities) inflation, meaning that an increase in inflation will also increase the deficit. In
the US plans, the pensions in payment are not linked to inflation, so this is a less material risk.

Life Expectancy: The majority of the plans’ obligations are to provide benefits for the life of the member. Whilst the plans allow for an increase in life
expectancy, increases above this assumption will result in an increase in the plans’ liabilities. This is particularly significant in the UK plan, where
inflationary increases result in higher sensitivity to changes in life expectancy. During the year, the scheme has reduced its exposure by purchasing an
insurance product that will pay the pensions of some of the scheme’s pensioners.

Change in Regulations: The Group is aware that future changes to the regulatory framework may impact the funding basis of the various plans in the
future. The Group’s pensions department monitors the changes in legislation and analyses the risks as and when they occur.

Investments are well diversified, such that the failure of any single investment would not have a material impact on the overall level of assets. A large
portion of assets consists of unit linked insurance policies with underlying investments in quoted equities and quoted bonds, although the Group also
invests in property and cash. The Group believes that quoted equities offer the best returns over the long term with an acceptable level of risk. The
trustees of all the UK funds have moved the overwhelming majority of their assets to low cost investment funds in consultation with the Group whilst
maintaining a prudent diversification.

24 Share Capital
Equity
ordinary Nominal
shares value
Issued and fully paid number £m

At 31 December 2019 736,535,179 74

At 31 December 2020 736,535,179 74

The holders of ordinary shares (par value 10 pence) are entitled to receive dividends as declared from time to time and are entitled to one vote per
share at meetings of the parent company.

Allotment of Ordinary Shares and Release of Treasury Shares

During the year nil ordinary shares (2019: nil ordinary shares) were allotted and 2,988,443 ordinary shares were released from Treasury (2019: 2,244,826)
to satisfy vestings/exercises under the Group’s various share schemes as follows:
2020 2019
Number of Consideration Number of Consideration
Ordinary shares of 10p shares £m shares £m

Executive Share Options – exercises 2,774,400 120 1,216,229 51

Restricted Shares Awards – vesting 5,804 – 803,861 –
Total under Executive Share Option and Restricted Share Schemes 2,780,204 120 2,020,090 51
Senior Executives Share Ownership Policy Plan – vesting – – 20,000 –
Savings-Related Share Option Schemes – exercises 208,239 11 204,736 10
Total 2,988,443 131 2,244,826 61

Market Purchases of Shares

In 2020, 2,988,443 Treasury shares were released (2019: 2,244,826), leaving a balance held at 31 December 2020 of 23,800,092 (2019: 26,788,535).
Proceeds received from the reissuance of Treasury shares to exercise share options were £131 million (2019: £61 million).

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25 Share-Based Payments
The Group operates a number of incentive schemes, including a share option scheme, a restricted share scheme, and other share award schemes.
During 2017, as part of a transitional scheme for MJN employees, a cash-settled scheme replaced an MJN equity-settled scheme. All other schemes
within the Group are equity-settled. The total charge for share-based payments for the year was £15 million (2019: £18 million).

Executive Share Awards

Executive share awards, comprising both Executive Share Options and Restricted Share Awards, are awarded to the senior management team.
Executive Share Options are awarded at an exercise price determined on grant date and become payable on exercise – following satisfaction
of performance criteria. Restricted Share Awards entitle the recipient to receive shares at no cost following satisfaction of the following
performance criteria.

For awards granted before December 2012:

Adjusted earnings per share growth over three years (%) <6% 6% 7% 8% ≥9%
Proportion of awards vesting (%) Nil 40% 60% 80% 100%

For awards granted in December 2013 and thereafter:

Adjusted earnings per share growth over three years (%) <6% 6% Between 6% and 10% ≥10%
Proportion of awards vesting (%) Nil 20% Straight-line vesting between 20% and 100% 100%

For awards granted in May 2019 and thereafter:

Threshold Maximum
Weighting (20% vesting) (100% vesting)

Adjusted EPS growth at actual FX rates (three-year CAGR) 25% 4% 9%

Adjusted EPS growth at constant FX rates (three-year CAGR) 25% 4% 9%
Net Revenue growth (three-year CAGR) 25% 2% 6%
Return on capital employed (in final year) 25% 10.8% 12.8%

For awards granted in May 2020 and thereafter:

Threshold Maximum
Weighting (20% vesting) (100% vesting)

Adjusted EPS at actual FX rates (in final year) 12.5% 302p 337p
Adjusted EPS at constant FX rates (in final year) 12.5% 323p 360p
Net Revenue growth (three-year CAGR) 50.0% 2.0% 5.0%
Return on capital employed (in final year) 25.0% 11.8% 13.1%

The cost is spread over the three years of the performance period. For Group Executive Committee and members of the Group Leadership Team,
vesting conditions must be met over the three-year period and are not retested. For the remaining members of the senior management team the
targets can be retested after four or five years. If any target has not been met, any remaining shares or options which have not vested will lapse.

Other Share Awards

Other share awards represent SAYE Schemes (offered to all staff within the relevant geographic area) and a number of Senior Executive Share
Ownership Policy Plan (SOPP) awards. Other share awards have contractual lives of between three and eight years and are generally not subject to
any vesting criteria other than the employee’s continued employment.

Individual tranches of these other share awards are not material for detailed disclosure and therefore have been aggregated in the tables following.

Modifications to Share Awards

The Remuneration Committee approved modifications to all unexercised share schemes in December 2014 following the demerger of RB
Pharmaceuticals to compensate for the loss of scheme value. For SAYE schemes this was in the form of a one-off payment. For executive share
awards this included an adjustment to shares under the amount of each grant, and the lowering of exercise price, where applicable. There is no
change to the IFRS fair value charge as a result of these modifications.

Summary of Shares Outstanding

All outstanding Executive and Other share awards as at 31 December 2020 and 31 December 2019 are included in the tables following which analyse the
charge for 2020 and 2019. The Group has used the Black-Scholes model to calculate the fair value of one award on the date of the grant of the award.

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25 Share-Based Payments continued

Table 1: Fair value
The most significant awards are share options and restricted shares, details of which have been provided below.

Black-Scholes model assumptions

Exercise Modified Share Risk-free Fair value
price at exercise price on Dividend interest of one
grant price Performance grant date Volatility yield Life rate award
Award Grant date £ £ period £ % % years % £

Share options
2009 8 December 2008 27.29 26.54 2009–11 27.80 25 3.1 4 2.78 4.69
2010 7 December 2009 31.65 30.78 2010–12 31.80 26 3.5 4 1.69 4.70
2011 1 December 2010 34.64 33.68 2011–13 34.08 26 4.3 4 2.16 4.49
2012 5 December 2011 32.09 31.20 2012–14 32.19 25 5.4 4 1.00 3.18
2013 3 December 2012 39.14 38.06 2013–15 39.66 20 4.3 4 0.61 3.29
2014 11 December 2013 47.83 46.51 2014–16 46.69 19 3.7 4 0.76 3.85
2015 1 December 2014 50.57 50.57 2015–17 52.40 17 4.0 4 1.03 4.34
2016 2 December 2015 63.25 63.25 2016–18 64.15 18 2.9 4 1.07 6.75
2017 1 December 2016 67.68 67.68 2017–19 66.28 18 3.0 4 0.46 5.54
2018 30 November 2017 64.99 64.99 2018–20 64.86 18 3.4 4 0.68 5.58
2019 10 May 2019 60.83 60.83 2019–21 61.45 20 3.7 4 0.83 5.89
2020 1 May 2020 65.20 65.20 2020–22 65.70 21 2.6 4 0.55 7.96
Restricted shares
2015 1 December 2014 – – 2015–17 52.40 17 4.0 4 1.03 43.93
2016 2 December 2015 – – 2016–18 64.15 18 2.9 4 1.07 57.13
2017 1 December 2016 – – 2017–19 66.28 18 3.0 4 0.46 58.85
2018 30 November 2017 – – 2018–20 64.86 18 3.4 4 0.68 56.71
2019 10 May 2019 – – 2019–21 61.40 19 3.7 4 0.83 53.02
2020 1 May 2020 – – 2020–22 65.70 21 2.6 4 0.55 59.17

Table 2: Share awards movements 2020

Movement in number of options
Options
Options outstanding at
outstanding at Granted/ 31 December
1 January 2020 adjustments Lapsed Exercised 2020
Award number number number number number

Share options1
2011 71,509 – (2,400) (69,109) –
2012 367,374 – (2,210) (213,753) 151,411
2013 646,593 – (2,057) (396,786) 247,750
2014 924,419 – (2,057) (465,066) 457,296
2015 1,298,544 – (5,000) (550,578) 742,966
2016 1,904,977 – (95,138) (689,037) 1,120,802
2017 1,841,056 – (1,219,134) (48,015) 573,907
2018 2,171,480 – (331,924) (2,008) 1,837,548
2019 2,385,439 – (299,381) – 2,086,058
2020 – 2,626,735 (31,683) – 2,595,052
Restricted shares1
2016 144,288 – (19,425) – 124,863
2017 824,061 – (546,909) (276,977) 175
2018 1,067,280 – (190,262) (27,159) 849,859
2019 1,364,136 – (186,828) (62,422) 1,114,886
2020 – 1,448,758 (29,041) (15,340) 1,404,377
Other share awards
UK SAYE 746,570 184,943 (65,490) (127,613) 738,410
US SAYE 622,765 161,659 (55,048) (56,381) 672,995
Overseas SAYE 1,889,663 576,689 (149,851) (14,398) 2,302,103
SOPP 103,200 88,400 (12,800) (22,800) 156,000
Weighted average exercise price (share options) £58.43 £65.20 £65.77 £49.51 £60.97

1. Grant date and exercise price for each of the awards are shown in Table 1

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25 Share-Based Payments continued

Table 3: Share awards movements 2019
Movement in number of options
Options
Options outstanding at
outstanding at Granted/ 31 December
1 January 2019 adjustments Lapsed Exercised 2019
Award number number number number number

Share options1
2010 99,281 – (2,557) (96,724) –
2011 119,643 – (1,600) (46,534) 71,509
2012 480,103 – (2,037) (110,692) 367,374
2013 934,375 – (2,057) (285,725) 646,593
2014 1,235,516 – (6,154) (304,943) 924,419
2015 1,694,784 – (34,388) (361,852) 1,298,544
2016 2,002,591 – (87,855) (9,759) 1,904,977
2017 2,091,357 – (250,301) – 1,841,056
2018 2,490,055 – (318,575) – 2,171,480
2019 – 2,491,340 (105,901) – 2,385,439
Restricted shares1
2016 930,898 – (52,774) (733,836) 144,288
2017 919,587 – (78,200) (17,326) 824,061
2018 1,269,418 – (151,289) (50,849) 1,067,280
2019 – 1,411,339 (45,353) (1,850) 1,364,136
Other share awards
UK SAYE 693,313 316,660 (143,765) (119,638) 746,570
US SAYE 567,300 176,208 (63,610) (57,133) 622,765
Overseas SAYE 1,680,092 639,818 (402,282) (27,965) 1,889,663
SOPP 118,800 24,400 (20,000) (20,000) 103,200
Weighted average exercise price (share options) £56.59 £60.83 £64.01 £42.73 £58.43

1. Grant date and exercise price for each of the awards are shown in Table 1

For options outstanding at the year end the weighted average remaining contractual life is 5.42 years (2019: 5.64 years). Options outstanding at
31 December 2020 that could have been exercised at that date were 3,427,971 (2019: 5,374,275) with a weighted average exercise price of £53.38
(2019: £49.82).

The assumptions made in determining the share-based payments charge, in respect to the achievement of performance criteria, are based on the
Directors’ expectations in light of the Group’s business model and relevant published targets.

Under the terms of the schemes, early exercise may only be granted in exceptional circumstances and therefore the effect of early exercise is not
incorporated into the calculation.

No material modifications have occurred requiring revision to the share-based payment charges for the outstanding awards.

An estimate of future volatility is made with reference to historical volatility over a similar time period to the performance period or the contractual
life as appropriate. Historical volatility is calculated based on the annualised standard deviation of the Group’s daily share price movement, being an
approximation to the continuously compounded rate of return on the share.

National Insurance contributions are payable in respect of certain share-based payment transactions and are treated as cash-settled transactions.

The weighted average share price for the year was £68.19 (2019: £61.40).

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25 Share-Based Payments continued

Options and Restricted Shares Granted During the Year
Options and restricted shares granted during the year which may vest or become exercisable at various dates between 2020 and 2027 are as follows:
Price to be Number of
paid shares under
£ option

Executive share option and restricted share schemes

Reckitt Benckiser 2020 Long-term Incentive Plan – share options 65.20 2,626,735
Reckitt Benckiser Long-term Incentive Plan – restricted shares – 1,448,758
Reckitt Benckiser Group Senior Executive Share Ownership Policy Plan – 88,400
Total 4,163,893
Savings-related share option schemes
UK Scheme 62.44 184,943
US Scheme 62.44 161,659
Overseas Scheme 62.44 576,689
Total 923,291

Options and Restricted Shares Outstanding at 31 December 2020

Options and restricted shares which have vested or may vest at various dates between 2020 and 2027 are as follows:

Price to be paid £ Number of shares under option

From To 2020 2019

Executive share option and restricted share schemes

Reckitt Benckiser Long-term Incentive Plan 2011 – Annual Grant – options 31.20 78.00 9,812,790 11,611,391
Reckitt Benckiser Long-term Incentive Plan 2016 – Annual Grant – restricted shares – – 3,494,160 3,399,765
Reckitt Benckiser Senior Executives Share Ownership Policy Plan – – 156,000 103,200
Total 13,462,950 15,114,356
Savings-related share option schemes
UK Scheme 41.20 62.44 738,410 746,570
US Scheme 47.44 62.44 672,995 622,765
Overseas Scheme 47.44 62.44 2,302,103 1,889,663
Total 3,713,508 3,258,998

26 Other Reserves
Foreign
currency
Hedging translation Total other
Reserve reserve reserves
£m £m £m

Balance at 1 January 2019 7 430 437

Other comprehensive income/(expense)
Losses on cash flow hedges, net of tax (9) – (9)
Net exchange losses on foreign currency translation, net of tax – (578) (578)
Gains on net investment hedges – 70 70
Total other comprehensive expense for the year (9) (508) (517)
Balance at 31 December 2019 (2) (78) (80)
Other comprehensive (expense)
Losses on cash flow hedges, net of tax (17) – (17)
Net exchange losses on foreign currency translation, net of tax – (207) (207)
Losses on net investment hedges – (75) (75)
Total other comprehensive expense for the year (17) (282) (299)
Balance at 31 December 2020 (19) (360) (379)

The hedging reserve comprises the effective portion of the cumulative net change in fair value of cash flow hedging instruments related to hedge
transactions that are extant at year end.

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26 Other Reserves continued

The foreign currency translation reserve contains the accumulated foreign exchange differences from the translation of the Financial Statements of
the Group’s foreign operations arising when the Group’s entities are consolidated. The reserve also contains the translation of liabilities that hedge the
Group’s net exposure in a foreign currency.

27 Related Party Transactions

Put and Call Options with Non-controlling Shareholders
At 31 December 2020, within the Health Operating Segment, there are symmetrical put and call options existing over the non-controlling
shareholdings in RB & Manon Business Co. Ltd, RB & Manon Business Limited and RB (China Trading) Limited. In 2018, the parties agreed to extend
these options to 31 December 2023. In the event that the options are not exercised in accordance with the agreement, they are automatically
extended for a further six years.

In addition, within the Hygiene Operating Segment, there are symmetrical put and call options existing over the non-controlling shareholdings in RB
(Hygiene Home) HK Limited, RB & Manon Hygiene Home (HK) Limited and RB & Manon Hygiene Home (Shanghai) Limited. These options were first
agreed in 2019 and are due to expire on 31 December 2024. In the event that the options are not exercised in accordance with the agreement, they
are automatically extended for a further six years.

The present value of these put option liabilities was £148 million (2019: £135 million).

Other
The Group has related party relationships with its Directors and key management personnel (Note 5).

28 Dividends
2020 2019
£m £m

Cash dividends on equity ordinary shares:

2019 Final paid: 101.6 p (2018: Final 100.2p) per share 721 709
2020 Interim paid: 73p (2019: Interim 73p) per share 520 518
Total dividends for the year 1,241 1,227

The Directors are proposing a final dividend in respect of the financial year ended 31 December 2020 of 101.6p per share which will absorb an
estimated £724 million of Shareholders’ funds. If approved by Shareholders it will be paid on 14 June 2021 to Shareholders who are on the register on
7 May 2021, with an ex-dividend date of 6 May 2021.

29 Discontinued Operations
In the year ended 31 December 2020, the Group recorded income of £50 million (2019: £898 million expense) in discontinued operations. This income
in 2020 relates to the partial release of a provision relating to the prior year settlement with the Department of Justice (DoJ) in relation to Indivior plc
matters, following a review of outstanding items relating to the DoJ settlement. The prior period expense reflects the charge to the Income
Statement for the $1.4 billion settlement agreed with the DoJ, which was paid in full by the end of 2019 and amounts deemed necessary to cover any
remaining litigation exposure.

In January 2021, Indivior plc agreed to pay $50 million to the Group over the next five years to settle indemnity claims relating to the Group’s previous
settlement with the DoJ, and certain related matters. Amounts in relation to this settlement with Indivior will be recognised as income from
discontinued operations in 2021.

30 Post Balance Sheet Events

Subsequent to the year end, the Group repaid $400 million (£291 million) of term loans earlier than their contractual maturity date. At 31 December
2020, these term loans were presented in non-current liabilities on the Balance Sheet as they were not due for repayment based on their contractual
maturity date within the next twelve months.

On 23 February 2021, the Group entered into an agreement for the sale of the Scholl, Krack, Amopé , ProSport, and Eulactol brands and certain related
assets for consideration of approximately £275 million, subject to customary closing adjustments. The transaction is subject to the satisfaction of
relevant closing conditions and completion is expected by the third quarter of 2021. The assets and liabilities attributable to the disposal group did
not qualify as held for sale at 31 December 2020, and therefore have not been separately presented as held for sale in these Financial Statements.

On 23 February 2021, the Group entered into a definitive agreement to acquire the Biofreeze and TheraPearl brands and associated assets from
Performance Health for cash consideration of approximately $1,075 million, subject to customary closing adjustments. The transaction is subject to
certain regulatory approvals as well as other customary closing conditions and completion is expected in the second quarter of 2021.

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FIVE YEAR SUMMARY

The five-year summary below is presented on a statutory basis. The years ending 31 December 2016, 31 December 2017, 31 December 2018,
31 December 2019, and 31 December 2020 show the results for continuing operations and exclude the impact of RB Food and RB Pharmaceuticals.

The balance sheet has not been restated for the impact of discontinued operations.

Restated1 Restated2
2020 2019 2018 2017 2016
Income Statement £m £m £m £m £m

Net Revenue 13,993 12,846 12,597 11,449 9,480

Operating profit/(loss) 2,160 (1,954) 3,058 2,737 2,269
Net finance expense (286) (153) (338) (238) (16)
Share of loss of equity-accounted investees, net of tax (1) – – – –
Profit/(Loss) before income tax 1,873 (2,107) 2,720 2,499 2,253
Income tax (expense)/benefit (720) (665) (536) 894 (520)
Attributable to non-controlling interests (16) (13) (20) (17) (4)
Net income/(loss) attributable to owners of the parent company from
continuing operations 1,137 (2,785) 2,164 3,376 1,729
Balance Sheet
Net assets 9,159 9,407 14,771 13,557 8,426
Key Statistics – Reported basis
Operating margin 15.4% (15.2%) 24.3% 23.9% 23.9%
Diluted earnings per share, continuing 159.3p (393.0p) 305.2p 474.7p 242.1p
Declared total dividends per ordinary share 174.6p 174.6p 170.7p 164.3p 153.2p

1. Restated for the adoption of IFRS 16. The 2016 and 2017 balances have not been restated
2. Restated for the adoption of IFRS 15. The 2016 balances have not been restated

Reckitt Annual Report and Accounts 2020 219

 PA R E N T C O M PA N Y B A L A N C E S H E E T

2020 2019
As at 31 December Notes £m £m

Fixed assets
Investments 2 14,975 14,963
Current assets
Debtors due within one year 3 56 42
Debtors due after more than one year 4 3 2
Cash and cash equivalents – 4
59 48
Current liabilities
Creditors due within one year 5 (9,652) (8,425)
Net current liabilities (9,593) (8,377)
Total assets less current liabilities 5,382 6,586
Creditors due after more than one year 5 (30) –
Provisions for liabilities and charges 6 (43) (99)
Net assets 5,309 6,487
EQUITY
Share capital 7 74 74
Share premium 252 245
Retained earnings 4,983 6,168
Total equity 5,309 6,487

The Financial Statements on pages 220 to 236 were approved by the Board of Directors on 15 March 2021 and signed on its behalf by:

Christopher Sinclair Laxman Narasimhan

Director Director
Reckitt Benckiser Group plc Reckitt Benckiser Group plc

Company Number: 06270876

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PA R E N T C O M PA N Y S TAT E M E N T O F C H A N G E S I N E Q U I T Y

Share Share Retained Total

capital premium earnings equity
£m £m £m £m

Balance at 1 January 2019 74 245 7,962 8,281

Comprehensive income
Loss for the financial year – – (646) (646)
Total comprehensive loss – – (646) (646)
Transactions with owners
Treasury shares reissued – – 61 61
Share-based payments – – 4 4
Capital contribution in respect of share-based payments – – 14 14
Cash dividends – – (1,227) (1,227)
Total transactions with owners – – (1,148) (1,148)
Balance at 31 December 2019 74 245 6,168 6,487
Comprehensive income
Loss for the financial year – – (79) (79)
Total comprehensive loss – – (79) (79)
Transactions with owners
Treasury shares reissued – 7 124 131
Share-based payments – – 3 3
Capital contribution in respect of share-based payments – – 12 12
Purchase of ordinary shares by employee share ownership trust – – (4) (4)
Cash dividends – – (1,241) (1,241)
Total transactions with owners – 7 (1,106) (1,099)
Balance at 31 December 2020 74 252 4,983 5,309

Reckitt Benckiser Group plc has £4,347 million (2019: £5,543 million) of its retained earnings available for distribution. Details of Treasury shares and
other equity transactions are included in Note 24 of the Group Financial Statements.

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1 Parent Company Accounting Policies
The principal accounting policies are summarised below. They have all
been applied consistently throughout the year and the preceding year.
General Information and Basis of Accounting
Reckitt Benckiser Group plc is a company incorporated in the United
Kingdom, registered in England and Wales under the Companies Act
2006, and is a public limited company. The address of the registered
office is given on page 234. The nature of the Group’s operations and its
principal activities are set out in the Strategic Report on pages 1 to 93.
Statement of Compliance
The Financial Statements have been prepared under the historical
cost convention and in compliance with United Kingdom Accounting
Standards, including Financial Reporting Standard 102, The Financial
Reporting Standard applicable in the United Kingdom and the Republic
of Ireland (‘FRS 102’) and the Companies Act 2006.
The functional currency of Reckitt Benckiser Group plc is considered to
be Pounds Sterling because that is the currency of the primary economic
environment in which the company operates.
As permitted by s408 of the Companies Act 2006, a Statement of
Comprehensive Income is not presented for Reckitt Benckiser Group plc.
Going Concern
The Directors considered it appropriate to adopt the going concern
basis of accounting in preparing the company Financial Statements.
Having assessed the principal risks and other matters discussed in
connection with the Group’s Viability Statement as set out on page 93
of the Group Annual Report, the Directors considered it appropriate to
adopt the going concern basis of accounting in preparing the company
Financial Statements. When reaching this conclusion, the Directors took
into account the company’s overall financial position and exposure to
principal risks, including the ongoing impact of COVID-19 and future
business forecasts.
Financial Reporting Standard 102 – Reduced Disclosure Exemptions
FRS 102 allows a qualifying entity certain disclosure exemptions, subject
to certain conditions, which have been complied with.
The company has taken advantage of the following exemptions:
(i) from preparing a Statement of Cash Flows, on the basis that it is a
qualifying entity and the Group Cash Flow Statement, included in
these Financial Statements, includes the company’s cash flows;
(ii) from disclosing the company key management personnel
compensation, as required by FRS 102 paragraph 33.7.
The company’s results are included in the publicly available consolidated
Financial Statements of Reckitt Benckiser Group plc and these Financial
Statements may be obtained from 103-105 Bath Road, Slough, Berkshire
SL1 3UH or at www.reckitt.com.
Foreign Currency Translation
Transactions denominated in foreign currencies are translated using
exchange rates prevailing at the dates of the transactions. Foreign
exchange gains and losses resulting from the settlement of foreign
currency transactions and from the translation at year-end exchange
rates of monetary assets and liabilities denominated in foreign currencies
are recognised in the Statement of Comprehensive Income.
Taxation
The tax charge/credit is based on the result for the year and takes into
account taxation deferred due to timing differences between the
treatment of certain items for taxation and accounting purposes.
222 Reckitt Annual Report and Accounts 2020
Deferred tax liabilities are provided for in full and deferred tax assets are
recognised to the extent that they are considered recoverable.
A net deferred tax asset is considered recoverable if it can be regarded
as more likely than not that there will be suitable taxable profits against
which to recover carried forward tax losses and from which the future
reversal of underlying timing differences can be deducted.
Deferred tax is recognised in respect of all timing differences that
have originated but not reversed at the Balance Sheet date, where
transactions or events that result in an obligation to pay more tax in the
future or a right to pay less tax in the future have occurred at the Balance
Sheet date.
Deferred tax is measured at the average tax rates that are expected to
apply in the periods in which the timing differences are expected to
reverse, based on tax rates and laws that have been enacted or
substantively enacted by the Balance Sheet date. Deferred tax is
measured on an undiscounted basis.
Fixed Asset Investments
Fixed asset investments are stated at the lower of cost or their
recoverable amount, which is determined as the higher of net realisable
value and value in use. A review of the potential impairment of an
investment is carried out by the Directors if events or changes in
circumstances indicate that the carrying value of the investment may
not be recoverable. Such impairment reviews are performed in
accordance with FRS 102 Section 27 ‘Impairment of assets’.
Employee Share Schemes
Incentives in the form of shares are provided to employees under share
option and restricted share schemes which vest in accordance with
non-market conditions.
The fair value determined at the grant date of the equity-settled
share-based payments is expensed on a straight-line basis over the
vesting period, based on the Group’s estimate of equity instruments that
will eventually vest. At each Balance Sheet date, the Group revises its
estimate of the number of equity instruments expected to vest. The
impact of the revision of the original estimates, if any, is recognised in
comprehensive income or expense such that the cumulative expense
reflects the revised estimate, with a corresponding adjustment to
equity reserves.
Additional employer costs in respect of options and awards are charged,
including social security taxes, to the Statement of Comprehensive
Income over the same period, with a corresponding liability recognised.
The grant by the company of options over its equity instruments to the
employees of subsidiary undertakings in the Group is treated as a capital
contribution. The fair value of employee services received, measured by
reference to the grant date fair value, is recognised over the vesting
period as an increase to investment in subsidiary undertakings, with a
corresponding credit to equity in the company Financial Statements.
Financial Instruments
The company only enters into basic financial instrument transactions that
result in the recognition of basic financial assets and liabilities, including
trade and other debtors and creditors and loans to and from related
parties. These transactions are initially recorded at transaction price,
unless the arrangement constitutes a financing transaction where the
transaction is measured at the present value of the future receipt
discounted at a market rate of interest, and subsequently recognised
at amortised cost.
 S T R AT E G I C R E P O R T G OV E R N A N CE F I N A N C I A L S TAT E M E N T S

1 Parent Company Accounting Policies continued Accounting Estimates and Judgements

(i) Financial Assets
At the end of each reporting period financial assets measured at
amortised cost are assessed for objective evidence of impairment. If
an asset is impaired the impairment loss is the difference between the
carrying amount and the present value of the estimated cash flows
discounted at the asset’s original effective interest rate. The impairment
loss is recognised in comprehensive income or expense.
Financial assets are derecognised when (a) the contractual rights to the
cash flows from the asset expire or are settled, or (b) substantially all
the risks and rewards of the ownership of the asset are transferred to
another party, or (c) control of the asset has been transferred to another
party who has the practical ability to unilaterally sell the asset to an
unrelated third party without imposing additional restrictions.
(ii) Financial Liabilities
Basic financial liabilities, including loans from fellow Group companies,
are initially recognised at transaction price, unless the arrangement
constitutes a financing transaction, where the debt instrument is
measured at the present value of future payments. Debt instruments are
subsequently carried at amortised cost.
Financial liabilities are derecognised when the liability is extinguished, that
is when the contractual obligation is discharged, cancelled or expires.
Provisions
Provisions are recognised when the company has a present legal or
constructive obligation as a result of past events; it is more likely than not
that there will be an outflow of resources to settle that obligation; and
the amount can be reliably estimated. Provisions are valued at the
present value of the Directors’ best estimate of the expenditure required
to settle the obligation at the Balance Sheet date. Where it is possible
that a settlement may be reached or it is not possible to make a reliable
estimate of the estimated financial impact, appropriate disclosure is
made but no provision recognised.
In preparing these Financial Statements, management has made
judgements and estimates that affect the application of the company’s
accounting policies and the reported amounts of assets, liabilities,
income and expenses. Actual amounts and results may differ from these
estimates. The estimates and underlying assumptions are reviewed on
an ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects only
that period, or in the period of the revision and future periods if the
revision affects both current and future periods.
Key sources of estimation uncertainty
Each year, management is required to make a number of assumptions
regarding the future. The related year-end accounting estimates will, by
definition, seldom equal the final actual results. The company's Directors
are of the opinion that there are no estimates and assumptions that have
a significant risk of causing a material adjustment to the carrying amount
of assets and liabilities within the next financial year.
Other estimates
Set out below are other estimates where there is a risk of adjustment to
the carrying amounts of assets and liabilities within the next financial
year, but the risk of a material adjustment is not significant.
The company recognises legal provisions in line with the company’s
provisions policy. The level of provisioning in relation to civil and/or
criminal investigations is an area where management and legal
judgement is important, with individual provisions being based on best
estimates of the probable loss, considering all available information,
external advice and historical experience. As at 31 December 2020, the
company recognised legal provisions of £43 million (2019: £99 million) in
relation to a number of historical regulatory matters. Refer to Note 6 of
the company Financial Statements for further information.
The company’s Directors are of the opinion that there are no critical
judgements in applying the company’s accounting policies.

Where a company enters into a financial guarantee contract to 2 Investments

guarantee the indebtedness of other companies within its Group, the Shares in
company treats the guarantee contract as a contingent liability until such subsidiary
undertakings
a time as it becomes probable that the company will be required to
£m
make a payment under the guarantee.
Cost
Share Capital Transactions At 1 January 2019 14,949
When the company purchases equity share capital, the amount of the Additions during the year 14
consideration paid, including directly attributable costs, is recognised as At 31 December 2019 14,963
a charge to equity. Purchased shares are either held in Treasury in order Additions during the year 12
to satisfy employee options, or cancelled and, in order to maintain
At 31 December 2020 14,975
capital, an equivalent amount to the nominal value of the shares
cancelled is transferred from retained earnings. Provision for impairment
At 1 January 2019 –
Repurchase and Reissuance of Ordinary Shares Provided for during the year –
When shares recognised as equity are repurchased, the amount of the At 31 December 2019 –
consideration paid, including directly attributable costs, is recognised as Provided for during the year –
a charge to equity. Repurchased shares are classified as Treasury shares At 31 December 2020 –
and are presented in retained earnings. When Treasury shares are sold or
reissued subsequently, the amount received is recognised as an increase Net book amounts
in equity and the resulting surplus is presented within share premium. At 31 December 2019 14,963
At 31 December 2020 14,975
Dividends
Dividends payable are recognised when they meet the criteria for a
The Directors believe that the carrying value of the investments is
present obligation (i.e. when they have been approved).
supported by their underlying net assets.

The subsidiary undertakings as at 31 December 2020, all of which are

included in the Group Financial Statements, are shown in Note 11 of the
company Financial Statements.

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2 Investments continued 6 Provisions for Liabilities and Charges

With the exception of Reckitt Benckiser Limited (formerly Reckitt Legal Total
Benckiser plc), none of the subsidiaries are directly held by Reckitt provisions provisions
£m £m
Benckiser Group plc. All subsidiaries have a financial year ending
31 December with the exception of Reckitt Benckiser (India) Private At 1 January 2019 369 369
Limited, Reckitt Benckiser Healthcare India Private Limited, Reckitt
Benckiser Scholl India Private Limited, Mead Johnson Nutrition (India) Charged to the Statement of Comprehensive
Private Limited, RB Hygiene Home India Private Limited, Reckitt Piramal Income 79 79
Private Limited, and Reckitt & Colman Management Services (Ireland) Utilised during the year (331) (331)
Limited which have a year ending 31 March; Reckitt Benckiser Health Released to the Statement of Comprehensive
Kenya Limited which has a year ending 30 April; Lloyds Pharmaceuticals Income (18) (18)
which has a year ending 24 August; Reigate Square Holdings Sàrl which At 31 December 2019 99 99
has a year ending 31 August; RBHCR Health Reckitt Costa Rica Sociedad
Anónima which has a year ending 30 September; Crookes Healthcare Charged to the Statement of Comprehensive
Limited which has a year ending 31 January and Reckitt Benckiser Income 4 4
Healthcare (Ireland) Limited which has a year ending 30 November. Utilised during the year (4) (4)
Released to the Statement of Comprehensive
Additions during the year, and in 2019, relate to the grant by the company Income (56) (56)
of options over its equity instruments to the employees of subsidiary
At 31 December 2020 43 43
undertakings in the Group.

3 Debtors Due Within One Year Provisions have been analysed between current and non-current as
2020 2019 follows:
£m £m 2020 2019
£m £m
Amounts owed by Group undertakings 54 40
Current 43 99
Other debtors 2 2
Non-current – –
56 42
43 99
Amounts owed by Group undertakings are unsecured, interest free and
are repayable on demand (2019: same). Provisions relate to legal provisions in relation to a number of historical
matters. Refer to Note 18 of the Group Financial Statements.
4 Debtors Due After More Than One Year
2020 2019 7 Share Capital
£m £m Equity
ordinary Nominal value
Deferred tax assets 3 2 Issued and fully paid shares £m

At 1 January 2020 736,535,179 74

Deferred tax assets consist of short-term timing differences.
At 31 December 2020 736,535,179 74
5 Creditors
The holders of ordinary shares (par value 10 pence) are entitled to
Creditors due within one year:
receive dividends as declared from time to time and are entitled to one
2020 2019
vote per share at meetings of the Parent Company.
£m £m
The allotment of ordinary shares and release of Treasury shares are
Amounts owed to Group undertakings 9,647 8,412 disclosed in Note 24 of the Group Financial Statements.
Taxation and social security 4 4
Other creditors 1 9 8 Related Party Transactions
There were no transactions with related parties other than wholly
9,652 8,425
owned companies within the Group.
Included in the amounts owed to Group undertakings is an amount of
£9,548 million (2019: £8,368 million) which is unsecured, carries interest at
3M LIBOR and is repayable on demand (2019: same). All other amounts
owed to Group undertakings are unsecured, non-interest bearing and
are repayable on demand (2019: same).

Creditors due after more than one year:

Creditors due after more than one year relate to non-current tax
liabilities of £30 million (2019: £nil).

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9 Contingent Liabilities Proportion

The company has issued a guarantee to the trustees of the Reckitt of shares
Country of held by Registered
Benckiser Pension Fund covering the obligations of certain UK subsidiaries
Name Incorporation Share Class Reckitt Office
of the Group who are the sponsoring employers of the UK defined benefit
pension fund. The guarantee covers any amounts due to the pension fund Mead Johnson Nutrition
from these subsidiaries if they fail to meet their pension obligations. Argentina S.A. Argentina A/B 90.00% 147

Reckitt Benckiser
The company issued a guarantee on behalf of Reckitt Benckiser Treasury Argentina S.A. Argentina ORD 100.00% 63
Services plc in relation to the issuance of a $8,250 million bond (two
Reckitt Benckiser
tranches of $2,500 million, one tranche of $2,000 million, one tranche
Health Argentina S.A. Argentina ORD 100.00% 50
of $750 million and one tranche of $500 million) and in relation to the
issuance of a £500 million bond issued in May 2020, as well as the Mead Johnson Nutrition
issuance of €750 million commercial paper and $400 million term loan. (Australia) Pty Ltd Australia ORD 100.00% 95
Details are included in Note 15 of the Group Financial Statements. Reckitt Benckiser
(Australia) Pty Limited Australia ORD/PREF 100.00% 97
The company issued a guarantee on behalf of Reckitt Benckiser Treasury
Reckitt Benckiser
Services plc in relation to committed borrowing facilities totalling £5,500 Healthcare Australia Pty
million (2019: £5,500 million). Details of the facilities are included in Note Limited Australia ORD 100.00% 97
15 of the Group Financial Statements.
SSL Australia Pty Ltd Australia CRF/ORD 100.00% 97
The company issued a guarantee on behalf of Mead Johnson Nutrition RB (Hygiene Home)
Company in relation to outstanding senior notes of $1,550 million (2019: Australia Pty Ltd Australia ORD 100.00% 97
$2,300 million) issued by Mead Johnson Nutrition Company prior to
RB Hygiene Home
acquisition. The senior notes consist of one tranche of $750 million, one Austria GmbH Austria ORD 100.00% 87
tranche of $500 million and one tranche of $300 million. One tranche of
$750 million was settled during the year. Reckitt Benckiser
Austria GmbH Austria ORD 100.00% 87

The company has also issued a guarantee on behalf of Reckitt Benckiser Scholl Latin America
Treasury Services (Nederland) BV in relation to the issuance of two €850 Limited* Bahamas ORD 100.00% 66
million bonds issued in May 2020. Details are included in Note 15 of the Reckitt Benckiser
Group Financial Statements. Bahrain W.L.L Bahrain ORD 100.00% 64

Other contingent liabilities are disclosed in Note 20 of the Group Reckitt Benckiser
(Bangladesh) Limited Bangladesh ORD 82.96% 37
Financial Statements.
Reckitt Benckiser BY
10 Post Balance Sheet Events LLC Belarus – 100.00% 111
In January 2021, Indivior plc agreed to pay $50 million to the Group over RB Hygiene Home
the next five years to settle indemnity claims relating to the Group’s Belgium SA/NV Belgium ORD 100.00% 21
previous settlement with the DoJ, and certain related matters. Amounts
Reckitt Benckiser
in relation to this settlement with Indivior will be recognised as income
(Belgium) SA/NV Belgium ORD 100.00% 21
from discontinued operations in 2021.
Suffolk Insurance
11 Subsidiary Undertakings Limited Bermuda COMMON 100.00% 75
In accordance with section 409 of the Companies Act 2006 and Apenas Boa Nutrição
Schedule 4 of The Large and Medium-sized Companies and Groups Indústria de Alimentos
(Accounts and Reports) Regulations 2008, a full list of related Ltda. Brazil ORD 100.00% 83
undertakings as at 31 December 2020, including their registered Fenla Indústria,
office address, country of incorporation and the percentage of Comércio e
share ownership, is disclosed below. All undertakings are indirectly Administração Ltda Brazil ORD 100.00% 125
owned by Reckitt Benckiser Group plc, unless otherwise stated.
Mead Johnson do Brasil
Comércio e Importação
From time to time, management reviews the Group structure and seeks de Produtos de
to remove redundant, dormant or non-trading entities. During the year Nutrição Ltda. Brazil ORD 100.00% 55
ended 31 December 2020, nine legal entities were placed into liquidation
Reckitt Benckiser
as part of the review (2019: 19 legal entities). The removal of legal entities (Brasil) Comercial de
ultimately allows management to focus on the core business, reduces Produtos de Hygiene,
compliance obligations and cost, and improves transparency of the Limpeza e Cosméticos
Group to external parties. Ltda. Brazil ORD 100.00% 54

Reckitt Benckiser
All subsidiary undertakings of Reckitt Benckiser Group plc are included in (Brasil) Ltda Brazil ORD 100.00% 126
the consolidated Financial Statements of the Group.
Reckitt Benckiser
Health Comercial Ltda Brazil ORD 100.00% 56

Reckitt Benckiser (BVI) British Virgin

No. 1 Limited Islands ORD 100.00% 116

Reckitt Annual Report and Accounts 2020 225

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11 Subsidiary Undertakings continued

Proportion Proportion
of shares of shares
Country of held by Registered Country of held by Registered
Name Incorporation Share Class Reckitt Office Name Incorporation Share Class Reckitt Office

Reckitt Benckiser (BVI) British Virgin Mead Johnson

No. 2 Limited Islands ORD 100.00% 116 Nutritionals (China) Ltd
- Beijing Branch China – 100.00% 157
Reckitt Benckiser (BVI) British Virgin
No. 3 Limited Islands ORD 100.00% 116 Mead Johnson
Nutritionals (China) Ltd
PARTNERSHIP/ - Chendu Branch China – 100.00% 133
Reckitt Benckiser MEMBERSHIP
Bulgaria Eood* Bulgaria INTEREST 100.00% 140 Mead Johnson
Nutritionals (China) Ltd
Mead Johnson Nutrition - Fuzhou Branch China – 100.00% 129
(Canada) Co. Canada COMMON 100.00% 145
Mead Johnson
RB Health (Canada) Inc. Canada COMMON 100.00% 144 Nutritionals (China) Ltd
Reckitt Benckiser NEW (2018) - Qingdao Branch China – 100.00% 44
(Canada) Inc. Canada COMMON 100.00% 17 Mead Johnson
Reckitt Benckiser Nutritionals (China) Ltd
(Cayman Islands) Cayman - Shanghai Branch China – 100.00% 15
Limited Islands ORD 100.00% 119 Mead Johnson
RB Health Chile SpA Chile ORD 100.00% 57 Nutritionals (China) Ltd
- Shenzhen Branch China – 100.00% 44
Reckitt Benckiser Chile
S.A. Chile ORD 100.00% 57 Mead Johnson
Nutritionals (China) Ltd
Anhui Guilong - Xi’an Branch China – 100.00% 134
Pharmaceutical Trading
Company Ltd China – 100.00% 78 Mead Johnson
Nutritionals (China) Ltd. China ORD 88.89% 3
Guilong Pharmaceutical
(Anhui) Co. Ltd China ORD 100.00% 92 Mead Johnson Pediatric
Nutrition Technology
Guilong Pharmaceutical (Guangzhou) Ltd China ORD 100.00% 128
(Anhui) Co. Ltd₸ China – 100.00% 153
RB (Suzhou) Co. Ltd China – 100.00% 108
Mead Johnson Pediatric
Nutrition Institute Mead Johnson Nutrition
(China) Ltd China – 100.00% 127 Colombia Ltda. Colombia ORD 100.00% 69

Qingdao London Durex RB (Health) Colombia

Co., Ltd China ORD 100.00% 105 S.A.S. Colombia ORD 100.00% 69

Qingdao New Bridge Reckitt Benckiser

Corporate Management Colombia S.A. Colombia ORD 100.00% 68
Consulting Company RBHCR Health Reckitt
Limited China ORD 100.00% 105 Costa Rica Sociedad
RB & Manon Business Anonima Costa Rica COMMON 100.00% 136
Co., Ltd China – 75.05% 131 Reckitt Benckiser
RB & Manon Hygiene (Centroamerica) S.A. Costa Rica ORD 100.00% 136
Home (Shanghai) Reckitt Benckiser d.o.o Croatia ORD 100.00% 152
Limited China ORD 80.00% 16
Gainbridge Investments
RB (China) Holding Co. (Cyprus) Limited Cyprus ORD 100.00% 4
Ltd China – 100.00% 156
RB (Hygiene Home)
Reckitt & Colman Czech Republic, spol Czech
Guangzhou Limited China ORD 100.00% 102 s.r.o. Republic ORD 100.00% 166
Reckitt Benckiser Home Reckitt Benckiser PARTNERSHIP/
Chemical Products (Czech Republic), spol. Czech MEMBERSHIP
Trading (Shanghai) Co. s.r.o. Republic INTEREST 100.00% 166
Limited China ORD 100.00% 67
RB Health Nordic A/S Denmark ORD 100.00% 163
Reckitt Benckiser
Household Products RB Hygiene Home
(China) Company Nordic A/S Denmark ORD 100.00% 163
Limited China – 100.00% 103
Mead Johnson Nutrition Dominican
SSL Healthcare (Dominicana), S.A.₸ Republic – 100.00% 26
(Shanghai) Ltd China ORD 100.00% 130
RB Health Ecuador Cía.
Tai He Tai Lai Culture Ltda Ecuador ORD 100.00% 51
Communication Co Ltd China ORD 100.00% 158

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11 Subsidiary Undertakings continued

Proportion Proportion
of shares of shares
Country of held by Registered Country of held by Registered
Name Incorporation Share Class Reckitt Office Name Incorporation Share Class Reckitt Office

Reckitt Benckiser London International

Ecuador S.A. Ecuador ORD 100.00% 114 Trading Asia Limited Hong Kong ORD 100.00% 22

Reckitt Benckiser Egypt Mead Johnson Nutrition

Limited Egypt ORD 100.00% 120 (Hong Kong) Limited Hong Kong ORD 100.00% 2

Reckitt Benckiser Oriental Medicine

Hygiene Home Egypt Company Limited Hong Kong ORD 100.00% 22
Limited* Egypt ORD 100.00% 65
RB & Manon Business
Reckitt Benckiser Limited Hong Kong ORD 75.00% 154
(Latvia) SIA Eesti filial₸ Estonia – 100.00% 88
RB & Manon Hygiene
RB Health Nordic A/S Home Limited Hong Kong ORD 80.00% 132
sivuliike Suomessa₸ Finland – 100.00% 93
RB (Hygiene Home) HK
RB Hygiene Home Limited Hong Kong ORD/PREF 80.00% 1
Nordic A/S, sivuliike
Suomessa₸ Finland – 100.00% 139 Reckitt Benckiser Hong
Kong Limited Hong Kong ORD 100.00% 22
Airwick Industrie SAS France ORD 100.00% 30
RB (Hygiene Home)
RB Holding Europe Du Hungary Kft Hungary ORD 100.00% 61
Sud SAS France ORD 100.00% 30
PARTNERSHIP/
RB Hygiene Home Reckitt Benckiser MEMBERSHIP
France SAS France ORD 100.00% 30 Kereskedelmi Kft Hungary INTEREST 100.00% 10

Reckitt Benckiser Reckitt Benckiser

Chartres SAS France ORD 100.00% 7 Tatabanya Kft Hungary ORD 100.00% 61

Reckitt Benckiser Mead Johnson Nutrition

France SAS France ORD 100.00% 30 (India) Private Limited India ORD 100.00% 161

Reckitt Benckiser Reckitt Benckiser (India)

Healthcare France SAS France ORD 100.00% 30 Private Limited India ORD 100.00% 118

Kukident GmbH Germany COMMON 100.00% 89 Reckitt Benckiser

Healthcare India Private
Propack Produkte für Limited India ORD 100.00% 118
Haushalt und
Körperpflege GmbH Germany ORD 100.00% 124 Reckitt Benckiser Scholl
India Private Limited India ORD 100.00% 85
RB Hygiene Home
Deutschland GmbH Germany – 100.00% 79 Reckitt Piramal Private
Limited India ORD 100.00% 160
Reckitt & Colman
Sagrotan Verwaltungs- RB Hygiene Home India
gesellschaft GmbH Germany COMMON 100.00% 79 Private Limited India ORD 100.00% 118

Reckitt Benckiser PT Mead Johnson

Detergents GmbH Germany ORD 100.00% 79 Indonesia Indonesia ORD 90.10% 149

Reckitt Benckiser PT Reckitt Benckiser

Deutschland GmbH Germany COMMON 100.00% 79 Hygiene Home
Indonesia Indonesia ORD 100.00% 148
Reckitt Benckiser
Global R&D GmbH Germany COMMON 100.00% 79 PT Reckitt Benckiser
Hygiene Home Trading
Reckitt Benckiser Indonesia Indonesia ORD 100.00% 148
Holding GmbH & Co KG Germany – 100.00% 79
Pt Reckitt Benckiser
Reckitt Benckiser Hellas Indonesia Indonesia ORD 100.00% 86
Healthcare S.A. Greece ORD 100.00% 43
PT Reckitt Benckiser
Reckitt Benckiser Hellas Trading Indonesia Indonesia ORD 100.00% 94
Hygiene Home S.A. Greece ORD 100.00% 43
Reckitt Benckiser (Pars)
Reckitt Benckiser PJSC Iran ORD 100.00% 19
(Channel Islands)
Limited Guernsey ORD 100.00% 18 Crookes Healthcare
Limited Ireland ORD 100.00% 32
Reckitt Benckiser
Holdings (Channel Dorincourt Holdings
Islands) Limited Guernsey ORD 100.00% 18 (Ireland) Limited Ireland ORD 100.00% 32

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11 Subsidiary Undertakings continued

Proportion Proportion
of shares of shares
Country of held by Registered Country of held by Registered
Name Incorporation Share Class Reckitt Office Name Incorporation Share Class Reckitt Office

RB Ireland Hygiene SSL Capital Ltd Jersey ORD 100.00% 34

Home Commercial
Limited Ireland ORD 100.00% 42 Reckitt Benckiser
Health Kazakhstan LLP Kazakhstan – 100.00% 60
RB Reigate (Ireland)
Unlimited Company Ireland ORD 100.00% 32 Reckitt Benckiser
Kazakhstan LLP Kazakhstan – 100.00% 112
RB Winchester (Ireland)
Unlimited Company Ireland ORD 100.00% 32 Reckitt Benckiser East
Africa Limited Kenya ORD 99.99% 117
Reckitt & Colman
Management Services Reckitt Benckiser
(Ireland) Limited Ireland ORD 100.00% 32 Health Kenya Limited Kenya ORD 100.00% 14

Reckitt Benckiser Reckitt Benckiser

Finance (Ireland) Services (Kenya)
Unlimited Company Ireland ORD 100.00% 32 Limited Kenya ORD 100.00% 100

Reckitt Benckiser Reckitt Benckiser

Healthcare (Ireland) (Latvia) SIA Latvia ORD 100.00% 142
Limited Ireland ORD 100.00% 32
Reckitt Benckiser
Reckitt Benckiser (Latvia) SIA LT filialas₸ Lithuania – 100.00% 165
Ireland Limited Ireland ORD 100.00% 32
Canterbury Square
Reckitt Benckiser Holdings S.à.rl. Luxembourg ORD 100.00% 5
Management Services A/B/C/D/E/F/G/
RB Holdings
Unlimited Company Ireland H/I/K 100.00% 32
(Luxembourg) S.à.rl. Luxembourg ORD 100.00% 5
SSL Healthcare Ireland
RB Holdings
Limited Ireland ORD 100.00% 32
Luxembourg (2018)
Reckitt Benckiser (Near S.à.rl. Luxembourg ORD 100.00% 5
East) Limited Israel ORD 100.00% 39
RB Luxembourg (TFFC)
Reckitt Benckiser S.à.rl. Luxembourg ORD 100.00% 5
Commercial (Italia) S.r.l. Italy QUOTA 100.00% 164
RB Luxembourg
Reckitt Benckiser Holdings (TFFC)
Healthcare (Italia) S.p.A Italy ORD 100.00% 164 Limited₸ Luxembourg – 100.00% 5

Reckitt Benckiser Reckitt Benckiser

Holdings (Italia) S.r.l. Italy QUOTA 100.00% 164 Holdings (USA) Limited₸ Luxembourg – 100.00% 5

Reckitt Benckiser Italia Reckitt Benckiser

S.p.A Italy ORD 100.00% 164 Investments (No. 1)
S.à.rl. Luxembourg ORD 100.00% 5
RB Hygiene Home
Japan Ltd Japan ORD 100.00% 29 Reckitt Benckiser
Investments (No. 2)
Reckitt Benckiser Asia S.à.rl. Luxembourg ORD 100.00% 5
Pacific Limited₸ Japan – 100.00% 29
Reckitt Benckiser
Reckitt Benckiser Japan Investments (No. 4)
Limited Japan ORD 100.00% 29 S.à.rl. Luxembourg ORD 100.00% 5

Reckitt & Colman Reckitt Benckiser

(Jersey) Limited Jersey ORD/PREF 100.00% 91 Investments (No. 5)
S.à.rl. Luxembourg ORD 100.00% 5
Reckitt & Colman
Capital Finance Limited Jersey ORD 100.00% 91 Reckitt Benckiser
Investments (No. 6)
Reckitt Benckiser S.à.rl. Luxembourg ORD 100.00% 5
Jersey (No.1) Limited Jersey ORD 100.00% 91
Reckitt Benckiser
Reckitt Benckiser Investments (No. 7)
Jersey (No.2) Limited Jersey ORD 100.00% 91 S.à.rl. Luxembourg ORD 100.00% 5
Reckitt Benckiser Reckitt Benckiser
Jersey (No.3) Limited Jersey ORD 100.00% 91 Investments (No. 8)
S.à.rl. Luxembourg ORD 100.00% 5
Reckitt Benckiser
Jersey (No.5) Limited Jersey ORD 100.00% 91 Reckitt Benckiser N.V.₸ Luxembourg – 100.00% 5
Reckitt Benckiser Reckitt Benckiser S.à.rl. Luxembourg ORD 100.00% 5
Jersey (No.7) Limited Jersey ORD A/C/D 100.00% 91

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11 Subsidiary Undertakings continued

Proportion Proportion
of shares of shares
Country of held by Registered Country of held by Registered
Name Incorporation Share Class Reckitt Office Name Incorporation Share Class Reckitt Office

Reigate Square MJN Innovation Services

Holdings S.à.rl. Luxembourg ORD 100.00% 5 B.V. Netherlands ORD 100.00% 101

Winchester Square New Bridge Holdings

Holdings S.à.rl. Luxembourg ORD 100.00% 5 B.V. Netherlands ORD 100.00% 138

Mead Johnson Nutrition RB Hygiene Home

(Hong Kong) Limited₸ Macau – 100.00% 58 Netherlands B.V. Netherlands ORD 100.00% 138

Mead Johnson Nutrition RB NL Brands B.V. Netherlands ORD 100.00% 138

(Malaysia) Sdn Bhd Malaysia ORD 100.00% 143
Reckitt Benckiser (ENA)
RB (Health) Malaysia Sdn B.V. Netherlands ORD 100.00% 137
Bhd Malaysia ORD 100.00% 159
Reckitt Benckiser
Reckitt Benckiser (South America)
(Malaysia) Sdn Bhd Malaysia ORD 100.00% 98 Holding B.V. Netherlands ORD 100.00% 138

Manufactura MJN, S. de Reckitt Benckiser

R.L. de C.V. Mexico ORD 100.00% 49 (Spain) B.V. Netherlands ORD 100.00% 138

Mead Johnson Reckitt Benckiser

Nutricionales de México, Brands Investments B.V. Netherlands ORD 100.00% 138
S. de R.L. de C.V. Mexico ORD 100.00% 52
Reckitt Benckiser
RB Salute Mexico S.A de Calgon B.V. Netherlands ORD 100.00% 138
C.V. Mexico ORD 100.00% 71
Reckitt Benckiser Fabric
Reckitt Benckiser Treatment B.V. Netherlands ORD 100.00% 138
Mexico, S.A. de C.V. Mexico ORD 100.00% 52
Reckitt Benckiser Finish
Reckitt Benckiser B.V. Netherlands ORD 100.00% 138
Services S.A. de C.V. Mexico ORD 100.00% 74
Reckitt Benckiser FSIA
Servicios Nutricionales B.V. Netherlands ORD 100.00% 138
Mead Johnson, S. de
R.L. de C.V. Mexico ORD 100.00% 52 Reckitt Benckiser
Healthcare B.V. Netherlands ORD 100.00% 138
RB Health Mexico, S.A
de C.V. Mexico ORD 100.00% 52 Reckitt Benckiser
Laundry Detergents
RB Health Services (No. 1) B.V. Netherlands ORD 100.00% 138
Mexico, S.A de C.V. Mexico ORD 100.00% 52
Reckitt Benckiser
Reckitt Benckiser Laundry Detergents
Morocco Sarl AU Morocco ORD 100.00% 38 (No. 2) B.V. Netherlands ORD 100.00% 138

Beleggings- Reckitt Benckiser

maatschappij Lemore Lime-A-Way B.V. Netherlands ORD 100.00% 138
B.V. Netherlands ORD 100.00% 138
Reckitt Benckiser Marc
Central Square Holding B.V. Netherlands ORD 100.00% 138
B.V. Netherlands ORD 100.00% 138
Reckitt Benckiser N.V. Netherlands ORD 100.00% 138
Grosvenor Square
Holding B.V. Netherlands ORD 100.00% 138 Reckitt Benckiser Oven
Cleaners B.V. Netherlands ORD 100.00% 138
Hamol NL B.V. Netherlands ORD 100.00% 138
Reckitt Benckiser
Maddison Square Power Cleaners B.V. Netherlands ORD 100.00% 138
Holding B.V. Netherlands ORD 100.00% 138
Reckitt Benckiser Tiret
Mead Johnson B.V. Netherlands ORD 100.00% 101 B.V. Netherlands ORD 100.00% 138

MEMBERSHIP Reckitt Benckiser

Mead Johnson One C.V. Netherlands SHARES 100.00% 23 Treasury Services
(Nederland) B.V. Netherlands ORD 100.00% 137
MEMBERSHIP
Mead Johnson Two C.V. Netherlands SHARES 100.00% 23 Reckitt Benckiser
Vanish B.V. Netherlands ORD 100.00% 138
MJN Global Holdings
B.V. Netherlands ORD 100.00% 138 RB LATAM Holding B.V. Netherlands ORD 100.00% 138

MJN Holdings Reckitt Benckiser

(Netherlands) B.V. Netherlands ORD 100.00% 138 Hygiene Home Brands
B.V. Netherlands ORD 100.00% 138

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11 Subsidiary Undertakings continued

Proportion Proportion
of shares of shares
Country of held by Registered Country of held by Registered
Name Incorporation Share Class Reckitt Office Name Incorporation Share Class Reckitt Office

RB (Hygiene Home) PARTNERSHIP/

New Zealand Limited New Zealand ORD 100.00% 96 RB (Hygiene Home) MEMBERSHIP
Romania S.R.L. Romania INTEREST 100.00% 141
Reckitt Benckiser (New
Zealand) Limited New Zealand – 100.00% 20 PARTNERSHIP/
Reckitt Benckiser MEMBERSHIP
SSL New Zealand (Romania) S.R.L. Romania INTEREST 100.00% 47
Limited New Zealand – 100.00% 20
Reckitt Benckiser
Reckitt Benckiser Healthcare LLC Russia – 100.00% 33
Nigeria Limited Nigeria ORD 99.53% 12
Reckitt Benckiser IP LLC Russia – 100.00% 13
RB Health Nordic, NUF₸ Norway – 100.00% 90
Reckitt Benckiser LLC Russia – 100.00% 36
RB Hygiene Home
Nordic NUF₸ Norway – 100.00% 90 Mead Johnson Nutrition
(Asia Pacific) Pte. Ltd. Singapore ORD 100.00% 46
RB Hygiene Home
Pakistan Limited Pakistan ORD 98.68% 146 Mead Johnson Nutrition
(Singapore) Pte. Ltd. Singapore ORD 100.00% 46
Reckitt Benckiser
Pakistan Limited Pakistan ORD 98.68% 146 Mead Johnson Nutrition
Holdings (Singapore)
PARTNERSHIP/ Pte. Ltd. Singapore ORD 100.00% 46
Mead Johnson Nutrition MEMBERSHIP
(Panama), S. de R.L. Panama INTEREST 100.00% 48 Mead Johnson Nutrition
International Holdings
RB Health Peru S.R.L. Peru ORD 100.00% 70 Pte. Ltd. Singapore ORD 100.00% 46
Reckitt Benckiser Peru Reckitt Benckiser
S.A. Peru ORD 100.00% 80 (Singapore) Pte. Ltd. Singapore ORD 100.00% 11
2309 Realty Corporation Philippines A/B 88.32% 24 RB (Hygiene Home)
Slovakia spol. s.r.o Slovakia ORD 100.00% 82
Mead Johnson Nutrition
(Philippines), Inc. Philippines COMMON 100.00% 24 Reckitt Benckiser PARTNERSHIP/
(Slovak Republic), spol. MEMBERSHIP
Reckitt Benckiser
s.r.o. Slovakia INTEREST 100.00% 82
Healthcare (Philippines), COMMON/
Inc. Philippines PREF 100.00% 31 Reckitt Benckiser
Pharmaceuticals
Sphinx Holding COMMON/
(Proprietary) Limited South Africa ORD 100.00% 45
Company, Inc. Philippines PREF 38.00% 24
Reckitt Benckiser South
PARTNERSHIP/
Africa Health Holdings
Mead Johnson Nutrition MEMBERSHIP
(Pty) Limited South Africa ORD 100.00% 45
(Poland) Sp. z o.o Poland INTEREST 100.00% 151
Reckitt Benckiser South
PARTNERSHIP/
Africa Proprietary
Mead Johnson Nutrition MEMBERSHIP
Limited South Africa ORD 100.00% 45
Trading Poland Sp. z o.o Poland INTEREST 100.00% 151
Oxy Reckitt Benckiser
RB (Hygiene Home)
LLC South Korea – 100.00% 25
Poland Sp. z o.o Poland ORD 100.00% 110
Norwich Square Holding
Reckitt Benckiser
S.L. Spain ORD 100.00% 73
(Poland) S.A. Poland ORD 100.00% 150
RB Square Holdings
Reckitt Benckiser
Spain, S.L. Spain A/B 100.00% 73
Production (Poland) Sp.
z.o.o. Poland ORD 100.00% 150 Reckitt Benckiser
(Granollers) SL Spain ORD 100.00% 73
Reckitt Benckiser
(Portugal) S.A. Portugal ORD 100.00% 135 Reckitt Benckiser
España S.L. Spain ORD 100.00% 73
Reckitt Benckiser
Healthcare Portugal Reckitt Benckiser
Ltda Portugal QUOTA 100.00% 135 Healthcare S.A. Spain ORD 100.00% 73
Reckitt Benckiser Porto Relcamp Aie* Spain ORD 100.00% 73
Alto Lda Portugal QUOTA 100.00% 84
SSL Healthcare
Mead Johnson Nutrition Manufacturing S.A.* Spain ORD 100.00% 106
(Puerto Rico) Inc.₸ Puerto Rico – 100.00% 99
Reckitt Benckiser
(Lanka) Limited Sri Lanka ORD 99.99% 107

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11 Subsidiary Undertakings continued

Proportion Proportion
of shares of shares
Country of held by Registered Country of held by Registered
Name Incorporation Share Class Reckitt Office Name Incorporation Share Class Reckitt Office

RB Health Nordic A/S, Earex Products Limited* UK ORD 100.00% 8

filial₸ Sweden – 100.00% 167
eRB Trading Limited UK ORD 100.00% 9
RB Hygiene Home
Nordic A/S, filial₸ Sweden – 100.00% 167 ERH Propack Limited* UK ORD 100.00% 8

SSL Healthcare Sverige FF Homecare & Hygiene

AB Sweden ORD 100.00% 62 Limited UK PREFERRED 37.50% 9

RB Hygiene Home Glasgow Square

Switzerland AG Switzerland ORD 100.00% 123 Limited UK ORD 100.00% 9

Reckitt Benckiser Green, Young &

(Switzerland) AG Switzerland ORD 100.00% 123 Company Limited UK ORD 100.00% 9

Reckitt Benckiser AG Switzerland ORD 100.00% 123 Hamol Limited UK ORD 100.00% 9

Reckitt Benckiser Helpcentral Limited UK ORD 100.00% 9

Europe General
Howard Lloyd &
Partnership, Slough
Company,Limited UK ORD 100.00% 9
(UK), Wallisellen Branch₸ Switzerland – 100.00% 123
LI Pensions Trust
Mead Johnson Nutrition
Limited UK ORD 100.00% 9
(Taiwan) Ltd. Taiwan ORD 100.00% 41
Linden Germany A
Reckitt Benckiser HK
Limited UK ORD 100.00% 9
Limited Taiwan Branch₸ Taiwan – 100.00% 41
Linden Germany B
Mead Johnson Nutrition
Limited UK ORD 100.00% 9
(Thailand) Ltd. Thailand COMMON 100.00% 109
Lloyds Pharmaceuticals UK ORD 100.00% 9
RB Hygiene Home
(Thailand) Limited Thailand ORD 100.00% 104 London International
Group Limited UK ORD 100.00% 9
Reckitt Benckiser
(Thailand) Limited Thailand ORD 100.00% 109 LRC Investments
Limited* UK ORD/PREF 100.00% 8
Reckitt Benckiser
Healthcare LRC Products Limited UK ORD 100.00% 9
Manufacturing
(Thailand) Limited Thailand ORD/PREF 100.00% 40 LRC Secretarial Services
Limited UK ORD 100.00% 9
Reckitt Benckiser
Holding (Thailand) Mead Johnson Nutrition
Limited Thailand COMM/PREF 45.00% 109 (UK) Ltd* UK ORD 100.00% 8

SSL Manufacturing MJ UK Holdings Limited UK ORD 100.00% 9

(Thailand) Limited Thailand A/B 100.00% 6
MJN International
Reckitt Benckiser Ev ve Holdings (UK), Ltd. UK ORD 100.00% 9
Hjyen Ürünleri A.Ş. Turkey – 100.00% 115
New Bridge Street
Reckitt Benckiser Invoicing Limited* UK ORD 100.00% 8
Temizlik Malzemesi San.
ve Tic. A.Ş. Turkey – 100.00% 81 Nurofen Limited UK ORD 100.00% 9

103-105 Bath Road Open Championship

Limited UK ORD 100.00% 9 Limited* UK ORD 100.00% 8

Access VC Limited UK ORD 100.00% 9 Optrex Limited UK ORD 100.00% 9

Benckiser UK ORD 100.00% 35 Pharmalab Limited UK ORD 100.00% 9

Brevet Hospital Prebbles Limited* UK ORD/DEF 100.00% 8

Products (UK) Limited* UK ORD 100.00% 8
R & C Nominees Limited UK ORD 100.00% 9
British Surgical
R & C Nominees One
Industries Limited* UK ORD/PREF 100.00% 8
Limited UK ORD 100.00% 9
Crookes Healthcare
R & C Nominees Two
Limited UK ORD 100.00% 9
Limited UK ORD 100.00% 9
Cupal,Limited UK ORD/PREF 100.00% 9
RB (China Trading)
Dakin Brothers Limited UK ORD 100.00% 9 Limited UK ORD 80.00% 9

Durex Limited UK ORD 100.00% 9 RB Asia Holding Limited UK ORD 100.00% 9

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11 Subsidiary Undertakings continued

Proportion Proportion
of shares of shares
Country of held by Registered Country of held by Registered
Name Incorporation Share Class Reckitt Office Name Incorporation Share Class Reckitt Office

RB Holdings Reckitt Benckiser

(Nottingham) Limited UK ORD 100.00% 9 Corporate Services
Limited UK ORD 100.00% 9
RB Luxembourg (2016)
Limited UK ORD 100.00% 9 Reckitt Benckiser
Europe General PARTNERSHIP
RB Luxembourg Partnership UK SHARES 100.00% 9
Holdings (TFFC) Limited UK ORD 100.00% 9
Reckitt Benckiser
RB Mexico Investments Expatriate Services
Limited UK ORD 100.00% 9 Limited UK ORD 100.00% 9
RB Reigate (2019) Ltd UK ORD 100.00% 9 Reckitt Benckiser
Finance (2005) Limited UK ORD 100.00% 9
RB Reigate (UK) Limited UK ORD 100.00% 9
Reckitt Benckiser
RB UK Commercial
Finance (2007) UK ORD 100.00% 9
Limited UK ORD 100.00% 9
Reckitt Benckiser
RB UK Hygiene Home
Finance (2010) Limited UK ORD 100.00% 9
Commercial Limited UK ORD 100.00% 9
Reckitt Benckiser
RB USA (2019) Ltd UK ORD 100.00% 9
Finance Company
Reckitt & Colman Limited UK ORD 100.00% 9
(Overseas) Health
Reckitt Benckiser
Limited UK ORD 100.00% 9
Health Limited UK ORD 100.00% 9
Reckitt & Colman
Reckitt Benckiser
(Overseas) Hygiene
Healthcare (Central &
Home Limited UK ORD 100.00% 9
Eastern Europe) Limited UK ORD 100.00% 9
Reckitt & Colman
Reckitt Benckiser
(Overseas) Limited UK ORD 100.00% 9
Healthcare (CIS) Limited UK ORD 100.00% 9
Reckitt & Colman (UK)
Reckitt Benckiser
Limited UK ORD/PREF 100.00% 9
Healthcare (MEMA)
Reckitt & Colman Limited UK ORD 100.00% 9
Holdings Limited UK ORD 100.00% 9
Reckitt Benckiser
Reckitt & Colman Healthcare (UK) Limited UK ORD 100.00% 9
Pension Trustee Limited UK ORD 100.00% 9
Reckitt Benckiser
Reckitt & Colman Healthcare International
Trustee Services Limited UK ORD 100.00% 9
Limited* UK ORD 100.00% 8
Reckitt Benckiser
Reckitt & Sons Limited UK ORD 100.00% 9 Holdings (Channel
Islands) Limited₸ UK – 100.00% 9
Reckitt Benckiser
(Brands) Limited UK ORD 100.00% 9 Reckitt Benckiser
Holdings (Luxembourg)
Reckitt Benckiser Limited UK ORD/PREF 100.00% 9
(Grosvenor) Holdings
Limited UK ORD 100.00% 9 Reckitt Benckiser
Holdings (Overseas)
Reckitt Benckiser Limited UK ORD 100.00% 9
(Health) Holdings
Limited UK ORD 100.00% 9 Reckitt Benckiser
Holdings (TFFC) Limited UK ORD 100.00% 9
Reckitt Benckiser
(Hygiene Home) Reckitt Benckiser
Holdings Limited UK ORD 100.00% 9 Holdings (USA) Limited UK ORD 100.00% 9

Reckitt Benckiser Reckitt Benckiser

(RUMEA) Limited UK ORD 100.00% 9 Investments Limited UK ORD 100.00% 9

Reckitt Benckiser (UK) Reckitt Benckiser

Limited UK ORD 100.00% 9 Jersey (No.1) Limited₸ UK – 100.00% 9

Reckitt Benckiser (USA) Reckitt Benckiser

Limited UK ORD 100.00% 9 Jersey (No.2) Limited₸ UK – 100.00% 9

Reckitt Benckiser Asia Reckitt Benckiser

Pacific Limited UK ORD 100.00% 9 Jersey (No.3) Limited₸ UK – 100.00% 9

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11 Subsidiary Undertakings continued

Proportion Proportion
of shares of shares
Country of held by Registered Country of held by Registered
Name Incorporation Share Class Reckitt Office Name Incorporation Share Class Reckitt Office

Reckitt Benckiser Sonet Investments

Jersey (No.5) Limited₸ UK – 100.00% 9 Limited UK ORD 100.00% 9

Reckitt Benckiser Sonet Prebbles Limited UK ORD 100.00% 9

Limited˚ UK ORD 100.00% 9
Sonet Products Limited UK ORD 100.00% 9
Reckitt Benckiser
Luxembourg (2010) Sonet Scholl Healthcare
Limited UK ORD 100.00% 9 International Limited* UK ORD 100.00% 8

Reckitt Benckiser Sonet Scholl Healthcare

Luxembourg (No. 1) Limited* UK ORD 100.00% 8
Limited UK ORD 100.00% 9
Sonet Scholl Overseas
Reckitt Benckiser Investments Limited UK ORD 100.00% 9
Luxembourg (No. 2)
Sonet Scholl UK Limited UK ORD 100.00% 9
Limited UK ORD 100.00% 9
SSL (C C Manufacturing)
Reckitt Benckiser
Limited* UK ORD 100.00% 8
Luxembourg (No. 3)
Limited UK ORD 100.00% 9 SSL (C C Services)
Limited* UK ORD/PREF 100.00% 8
Reckitt Benckiser
Luxembourg (No. 4) SSL (MG) Polymers
Limited UK ORD 100.00% 9 Limited UK ORD 100.00% 9
Reckitt Benckiser SSL (MG) Products
Service Bureau Limited UK ORD 100.00% 9 Limited* UK ORD 100.00% 8
Reckitt Benckiser SSL (RB) Products
Treasury (2007) Limited UK ORD/PREF 100.00% 9 Limited UK ORD 100.00% 9
Reckitt Benckiser SSL (SD) International
Treasury Services plc UK ORD 100.00% 9 Limited* UK ORD 100.00% 8
Reckitt Benckiser USA SSL International plc UK ORD 100.00% 9
(2010) LLC₸ UK – 100.00% 9
SSL Products Limited UK ORD 100.00% 9
Reckitt Benckiser USA
(2013) LLC₸ UK – 100.00% 9 Suffolk Finance
Company Limited UK ORD/DEF 100.00% 9
Reckitt Benckiser USA
Finance (No.1) Limited UK ORD 100.00% 9 Tubifoam Limited UK ORD 100.00% 9

Reckitt Benckiser USA Ultra Laboratories

Finance (No.2) Limited UK ORD 100.00% 9 Limited* UK ORD 100.00% 8

Reckitt Benckiser USA W.Woodward,Limited UK ORD 100.00% 9

Finance (No.3) Limited UK ORD 100.00% 9
Medcom Marketing And
Reckitt Colman Prodazha Ukraine LLC Ukraine – 100.00% 121
Chiswick (OTC) Limited UK ORD 100.00% 9
Reckitt Benckiser
Rivalmuster* UK ORD 100.00% 8 Household and Health
Care Ukraine LLC Ukraine – 100.00% 28
Scholl (Investments)
Limited* UK ORD 100.00% 8 Reckitt Benckiser
Hygiene Home Ukraine
Scholl (UK) Limited UK ORD 100.00% 9 LLC Ukraine – 100.00% 122
Scholl Consumer RB Hygiene Home United Arab
Products Limited UK ORD 100.00% 9 Arabia FZE Emirates ORD 100.00% 59
Scholl Limited UK ORD/PREF 100.00% 9 Reckitt Benckiser United Arab
(RUMEA) Limited₸ Emirates – 100.00% 113
Seton Healthcare Group
No.2 Trustee Limited UK ORD 100.00% 9 Reckitt Benckiser United Arab
(RUMEA) Limited*₸ Emirates – 100.00% 76
Seton Healthcare No.1
Trustee Limited* UK ORD 100.00% 8 Reckitt Benckiser United Arab
Arabia FZE Emirates ORD 100.00% 59
Sonet Group Limited* UK ORD 100.00% 8
MEMBERSHIP
Sonet Healthcare
Exponential Health LLC USA SHARES 100.00% 26
Limited* UK ORD 100.00% 8
LRC North America Inc. USA COM/PREF 100.00% 26

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11 Subsidiary Undertakings continued Registered Office

Proportion 1 22/F W Square, 314-324 Hennessy Road, Wanchai, Hong Kong
of shares 2 25/F Chubb Tower, Windsor House, 311 Gloucester Road, Causeway,
Country of held by Registered
Hong Kong
Name Incorporation Share Class Reckitt Office
3 #2, Xiayuan Road, Dongji Industry Zone of Economic and
Mead Johnson & MEMBERSHIP Technology District, Guangzhou, Guangdong, China
Company LLC USA SHARES 100.00% 26
4 1 Lampousas Street, P.C. 1095, Nicosia, Cyprus
Mead Johnson Nutrition 5 1 rue de la Poudrerie, Leudelange, L-3364, Luxembourg
(Dominicana), S.A. USA COMMON 100.00% 26
6 100 Moo 5, Bangsamak Sub-District, Bangpakong District,
Mead Johnson Nutrition Chachoengsao Province 24180, Thailand
(Puerto Rico) Inc. USA COMMON 100.00% 77
7 102 rue de Sours, 28000 Chartres, France
Mead Johnson Nutrition Membership 8 1020 Eskdale Road Winnersh, Wokingham, RG41 5TS, United
(Venezuela) LLC USA Shares 100.00% 26 Kingdom
Mead Johnson Nutrition 9 103-105 Bath Road, Slough, Berkshire, SL1 3UH, United Kingdom
Company USA COMMON 100.00% 26
10 1113 Budapest, Bocskai út 134-146, Budapest, Hungary
Mead Johnson Nutrition MEMBERSHIP 11 12 Marina Boulevard, #19-01 Marina Bay Financial Centre, 018982,
Nominees LLC USA SHARES 100.00% 26 Singapore
MEMBERSHIP 12 12 Montgomery Road, Yaba, Lagos, Nigeria
MJ USA Holdings LLC USA SHARES 100.00% 27 13 14 Kozhevnicheskaya Str, 115114, Moscow, Russian Federation
MJN Asia Pacific MEMBERSHIP 14 14 Riverside Drive, Arlington Building, 3rd Floor, Nairobi, 209/19,
Holdings LLC USA SHARES 100.00% 26 Kenya
MEMBERSHIP 15 15 / F, 755 Huaihai Middle Road, Huangpu District, Shanghai, China
MJN U.S. Holdings LLC USA SHARES 100.00% 26 16 16/F, Xu Jia Hui International Plaza, No.1033 Zhao Jia Bang Road,
MEMBERSHIP Shanghai, China
RB Health (US) LLC USA SHARES 100.00% 77 17 1680 Tech Avenue, Unit 2, Mississauga, ON L4W 5S9, Canada
RB Health MEMBERSHIP 18 1st & 2nd Floors, Elizabeth House, Les Ruettes Brayes, St Peter Port,
Manufacturing (US) LLC USA SHARES 100.00% 77 Guernsey, GY1 1EW
19 1st Floor, unit 11, No. 88 Baran Building, Sayed Road, Opposite Mellat
MEMBERSHIP
RB Manufacturing LLC USA SHARES 100.00% 26 Park, Vali-e-Asr Avenue,Tehran, Islamic Republic of Iran, Iran,
20 2 Fred Thomas Drive, Takapuna, Auckland, 0622, New Zealand
MEMBERSHIP
RB USA Holdings LLC USA SHARES 100.00% 26 21 20 Allée de la Recherche, Anderlecht, 1070 Brussels, Belgium
22 2206-11, Chubb Tower, Windsor House, 311 Gloucester Road,
MEMBERSHIP
Reckitt Benckiser LLC USA SHARES 100.00% 26
Causeway Bay, Hong Kong
23 225 North Canal Street, Floor 25, Chicago IL IL 60606, United States
Reckitt Benckiser USA MEMBERSHIP
(2010) LLC USA SHARES 100.00% 26 24 2309 Don Chino Roces Avenue Extension, Makati City, Philippines
25 24th Floor, Two IFC, 10 Gukjegeumyung-ro, Youngdeungpo-gu,
Reckitt Benckiser USA MEMBERSHIP
Seoul, 07326, Republic of Korea
(2012) LLC USA SHARES 100.00% 26
26 251 Little Falls Drive, Wilmington DE 19808, United States
Reckitt Benckiser USA MEMBERSHIP
27 2711 Centerville Road, Suite 400, Wilmington DE 19808, United
(2013) LLC USA SHARES 100.00% 26
States
SSL Holdings (USA) Inc. USA COMMON 100.00% 26 28 28A Stepana Bandery, Bld.G, Office 80, 04073, Kyiv, Ukraine
UpSpring LLC USA ORD 100.00% 72 29 3-20-14 Higashi-Gotanda, Shinagawa-ku, Tokyo, 141-0022, Japan
MEMBERSHIP 30 38 rue Victor Basch, 91300 Massy, France
Blisa, LLC USA SHARES 100.00% 26 31 3rd Floor Mead Johnson Nutrition Inc, 2309 Don Chino Roces
Extension, Makati City, Philippines
Mead Johnson Nutrition GENERAL
Venezuela, S.C.A. Venezuela PARTNER 100.00% 162 32 3rd Floor, Kilmore House, Park Lane, Spencer Dock, Dublin 1, Ireland
33 4, Shluzovaya emb, 3rd Floor, 115114, Moscow, Russian Federation
Reckitt Benckiser
Venezuela S.A. Venezuela ORD 100.00% 53 34 44 Esplanade, St Helier, JE4 9WG, Jersey
Mead Johnson Nutrition
35 4th Floor, 115 George Street, Edinburgh, EH2 4JN, Scotland
(Vietnam) Company 36 52/1, Kosmodamianskaya emb, 115054, Moscow, Russian Federation
Limited Vietnam – 100.00% 155 37 58-59 Nasirabad Industrial Area, Chittagong 4209, Bangladesh
₸
Branch 38 59 Boulevard Zerktouni, Residence Les Fleurs 6eme étage,
* In liquidation Casablanca, Morocco
˚ Interest held directly by Reckitt Benckiser Group plc 39 6 Hangar Street, PO Box 6440, I.Z. Neve Nee'man B Hod Hasharon,
4527703, Israel
40 65 Moo 12 Lardkrabang-Bangplee Road, Bangplee Samutprakarn,
Bangkok, 10540, Thailand

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11 Subsidiary Undertakings continued

41 6F., No. 136, Sec. 3, Ren’ai Rd., Da’an Dist, Taipei City 1, R.O.C., 10657, 74 Circuito Dr Gustavo Baz, 7, No. 7, Fracc Industrial El Pedregal,
Taiwan Atizapan de Zaragoza, Edomex, Mexico
42 6th Floor, 2 Grand Canal Square, Dublin 2, Ireland 75 Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda
43 7 Taki Kavalieratou Street, Kifissia, 145 64, Greece 76 Complex, Gate 4, Jebel Ali Freezone Authority., United Arab
44 707, Hisense Venture Center, 17 Shandong Road, Shinan District, Emirates
Qingdao, Shandong Province, China 77 Corporation Service Company, 251 Little Falls Drive, Wilmington,
45 8 Jet Park Road, Gauteng, Elandsfontein, 1406, South Africa New Castle County DE 19808, United States
46 80 Robinson Road, #02-00, 068898, Singapore 78 Dangtu Economic Development Zone, Maanshan City, Anhui
47 89-97 Grigore Alexandrescu street, Building A, 5th Floor, Sector 1, Province, China
Bucharest, Romania 79 Darwinstrasse 2-4, 69115, Heidelberg, Germany
48 Apartment 6G, 6th Floor, Edificio Bladex, Calle Avenida La Rotonda. 80 Dean Valdivia 148, Piso 5, San Isidro, Lima, Peru
Business Park, Corregimiento de Juan Diaz, Urbanización Costa Del 81 Dikilitaş Mah. Hakkı Yeten Cad., Selenium Plaza 10 C Fulya, İstanbul,
Este, Provincia De Panamá, Distrito de Panama, Panama 34349, Turkey
49 Av de las Granjas 972, Col. Santa Barbara, Azcapotzalco, CDMX, 82 Drieňová 3, 821 08 Bratislava, Slovakia
02230, Mexico 83 Estrada Fukutaro Yida, n. 930, Bairro Cooperativa, Sao Bernardo Do
50 Av Hipólito Alferez Bouchard, 4191 3°, Argentina Campo, Sao Paulo, 09852-060, Brazil
51 Av. Coruña 27-88 y Av. Orellana, Edificio Coruña Plaza, piso 7, Quito, 84 Estrada Malhada dos Carrascos, 12, Porto Alto, 2135-061, Samora
Ecuador Correia, Portugal
52 Av. Ejército Nacional Mexicano No.769, Corporativo Miyana Torre B, 85 F73 and 74, Sipcot Industrial Park, Irungattukottai, Sriperumbudur
Piso 6, Alcaldía Miguel Hidalgo, Colonia Granada, CP 11520, Mexico TK, Kancheepuram District, Tamilnadu, 602 117, India
53 Avenida Mara con Calle San José, Centro Comercial Macaracuay 86 Gedung Treasury Tower, District 8, Level 58, SCBD Lot 28, Jalan
Plaza, Nivel C3, Locales 5 y 12. Urb. Colinas de la California, Caracas, Jend. Sudirman Kav. 52-53, Kel. Senayan, Kec. Kebayoran Baru, Kota,
Bolivarian Republic of Venezuela Adm Jakarta Selatan, Prov, DKI Jakarta, Indonesia
54 Avenida Presidente Juscelino Kubitschek, 1909 cj 24 e 25, Vila Nova 87 Guglgasse 15, Vienna, 1110, Austria
Conceição, São Paulo/SP, Brazil 88 Harju maakond, Rae vald, Rae küla, Raeküla tee 5, 75310, Estonia
55 Avenida Presidente Juscelino Kubitschek, n° 1909, 24° andar, Parte 89 Heinestrasse 9, 69469, Weinheim, Germany
B, Torre Norte, Condomínio São Paulo Corporate Towers, Vila Nova 90 Henrik Ibsens gate 60A, Oslo, 0255, Norway
Conceição, Sao Paulo - SP, CEP 04.543-907, Brazil
91 IFC 5, St. Helier, JE1 1ST, Jersey
56 Avenida Presidente Juscelino Kubitschek, n° 1909, 24° andar, Parte
92 Intersection of Hongqi Road and Mingzhu Road, Dangtu Economic
C, Torre Norte, Condomínio São Paulo Corporate Towers, Vila Nova
Development Zone, Maanshan City, Anhui Province, China
Conceição, Sao Paulo, CEP 04.543-907, Brazil
93 Itsehallintokuja 6, Espoo, 02600, Finland
57 Avenida Presidente Kennedy, Lateral 5454, Oficina 1602 , Vitacura,
Región Metropolitana, Chile 94 Jl. Raya Narogong, Chamber A.I, Kel. Pasirangin, Kec Cileungsi, Kab.
Bogor. Prop. Jawa Barat, Indonesia
58 Avenida Son On, No.1040, Centre Indusrial Brilliant 2 Andar, Taipa,
Macau 95 King & Wood Mallesons, ‘Governor Phillip Tower’ Level 61, 1 Farrer
Place, Sydney NSW 2000, Australia
59 Behind GAC Complex, Jebel Ali Free Zone, PO Box 61344, Dubai,
United Arab Emirates 96 Level 1, 2 Fred Thomas Drive, Takapuna, Auckland, 0622, New
Zealand
60 Bld. 15/A, Koktem-1, Almaty, 050040, Kazakhstan
97 Level 47, 680 George Street, Sydney NSW 2000, Australia
61 Bocskai út 134-146, H-1113, Budapest, Hungary
98 Level 7, Menara Milenium, Jalan Damanlela, Pusat Bandar
62 Box 190, 101 23 Stockholm, Sweden
Damansara, 50490, Damansara Heights, Wilayah Persekutuan, Kuala
63 Bucarelli 2609 PB A, Ciudad Autonoma de Buenos Aires, Argentina Lumpur, Malaysia
64 Building 330, Road 1506, Block 115, Bahrain International Investment 99 Los Frailes Industrial Park, Ave. Esmeralda, Calle C # 475, Guaynabo,
Park, Hidd. Kingdom of Bahrain, Bahrain 00969, Puerto Rico
65 Building A1, Second Floor, Plot #A14b01, Cairo Festival City, First 100 LR.NO.1870/1/569, 2nd Floor, Apollo Centre, Ring Road Westlands,
District, Fifth Settlement, New Cairo, Cairo, Egypt Kenya
66 C/O 103-105 Bath Road, Slough, SL1 3UH, Berkshire, United Kingdom 101 Middenkampweg 2, 6545, CJ Nijmegen, The Netherlands
67 C6-8 Site 6F, No.333 Futexi Road, Waigaoqiao Free Trade Zone, 102 No. 3, Canglian 1 Road, ETDZ, Guangzhou, China
Shanghai City, China
103 No. 34 East Beijing Road, Jingzhou, Hubei, 434001, China
68 Calle 46, 5-76, Cali, Colombia
104 No. 388, Room No. 1903, Floor 19th Floor, Exchange Tower,
69 Calle 76, No. 11-17, Edificio Torre, Los Nogales Piso 2, Bogota, CO, Sukhumvit Road, Sub-District Klongtoey, District Klongtoey,
Colombia Bangkok, 10110, Thailand
70 Calle Dean Valdivia No.148, Torre 1, Ofic. 501, Urb. Jardín, San Isidro, 105 No.1-13 Shangma, Aodong Road, High-tech Industrial Development
Lima, Peru Zone, Qingdao City, Shandong Province, China
71 Calzada de Tlalpan No. 2996, Col. Ex Hacienda Coapa, Del.
Coyoacán, Cd. de México, C.P. 04980, Mexico
106 No.151, Avda. Can Fatjó, 08191, Rubí, Barcelona, Spain
72 Capitol Service Inc., 1675 South State Street, Suite B, Dover,
107 No.25, Shrubbery Garden, Colombo-04, Sri Lanka
Delaware 19901, United States
108 No.28 Middle Huasu Road, Liujiagang, Fuqiao Town, Taicang City,
73 Carrer de Mataró, 28, 08403, Granollers, Barcelona, Spain
Jiangsu Province, China

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11 Subsidiary Undertakings continued
109 No.388 Exchange Tower, 14th Floor, Sukhumvit Road, Klongtoey, 144
Bangkok, 10110, Thailand 145
110 Nowy Dwór Mazowiecki, Ul. Okunin 1, 05-100, Poland 146
111 of. 166, 66, K Liebknekhta st., Minsk, 220036, Belarus
112 Office 302, Building 15a, Koktem-1, Micro District, Almaty City, 147
Kazakhstan
113 Office No. 1801 – 1803, EMAAR Properties, Burj Khalifa, PO BOX 148
119841, United Arab Emirates
114 Oficina 4C, Av. 12 de Octubre, #26-48 y Orellana, Edificio Mirage, 149
Piso 4, Quito, 170525, Ecuador
115 Orta Mahallesi Demokrasi, Caddesi Benckiser Sitesi No.92, Tuzla,
Istanbul, Turkey 150
116 Palm Grove House, PO Box 438, Road Town, Tortola, British Virgin 151
Islands 152
117 Plot 209/2462, Likoni Road, Nairobi, Kenya 153
118 Plot No. 48, Industrial Area, Sector 32, Gurgaon - 122001, Haryana,
India 154
119 PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman
Islands 155
120 Polyium Building 22, Off Road 90, First District, 5th Settlement, New
Cairo, Egypt 156
121 Prospect 40-Richchia Zhovtnia., 120,1 Block, 03127, Kyiv, Ukraine
122 Prospect Stepana Bandery, 28-A, letter “G”, Kyiv, Ukraine, 04073 157
123 Richtistrasse 5, 8304, Wallisellen, Switzerland
124 Robert-Koch-Straße 1, 69115 Heidelberg, Germany 158
125 Rodovia Raposo Tavares, 8015 km 18, 1º andar, Sala 2, Jardim
Arpoador, Sao Paolo, CEP 05577-900, Brazil 159
126 Rodovia Raposo Tavares, 8015 km 18, Jardim Arpoador, Sao Paolo,
CEP 05577-900, Brazil 160
127 Room 01, 2nd Floor, Office Building, #2, Xia Yuan Road, Dongji
Industrial District, Guangzhou Development Zone, Guangzhou, 161
China
128 Room 02, 2nd Floor, Office Building, #2, Xia Yuan Road, Dongji 162
Industrial District, Guangzhou Development Zone, Guangzhou,
China
129 Room 11-13, 8 / F, Global Plaza, 158 Wusi Road, Fuzhou City, Gulou 163
District, China 164
130 Room 1605, No.660, Shangcheng Road, Shanghai, China 165
131 Room 1701, No. 1033, Zhao Jia Bang Road, Shanghai, China 166
132 Room 2001, 20/F, Greenfield Tower, Concordia Plaza, No.1 Science 167
Museum Road, Tsim Sha Tsui, Kowloon, Hong Kong
133 Room 2202, yanheng land Plaza, No.1, Section 2, Renmin South
Road, Jinjiang District, Chengdu, Sichuan Province, China
134 Rooms 1408 and 1409, 14 / F, Gaoxin No.9 Office Building, Gaoxin 4th
Road, Hi Tech Zone, Xi'an City, Shanxi Province, China
135 Rua D. Cristóvão da Gama, n.º 1, 1º, C/D, 1400-116 , Lisboa, Portugal
136 San Jose-Escazu En Escazu Corporate Center, Setimo Piso,
Costado Sur De Multiplaza Escazu, Costa Rica
137 Schiphol Boulevard 267, 1118 BH, Schiphol, The Netherlands
138 Siriusdreef 14, 2132 WT, Hoofddorp, The Netherlands
139 Självstyrelsevägen 6, Esbo, 02600, Finland
140 Sofia City - 1407, Lozenets region,22, Zlaten rog Str, 3rd floor, Office
4, Bulgaria
141 Str. Grigore Alexandrescu 89-97, Aripa Vest, Et. 5, Finish room, Sect.
1, Bucuresti, 010624, Romania
142 Strēlnieku iela 1A - 2, Rīga, LV-1010, Latvia
143 Suite 1005, 10th Floor, Wisma Hamzag Kwong Hing, No. 1 Leboh
Ampang, 50100 W.P. Kuala Lumpur, Malaysia
236 Reckitt Annual Report and Accounts 2020
Suite 2300, 550 Burard Street, Vancouver, BC V6C 2B5, Canada
Suite 600, 1741 Lower Water Street, Halifax, NS B3J 0J2, Canada
Tenancy 04 & 05, 3rd Floor, Corporate Office Block, Dolmen City,
HC, Block 4, Scheme 5, Clifton, Karachi, 75600, Pakistan
Teniente General Richieri 15, Ciudad de Sunchales, Santa Fe,
Argentina
Treasury Tower 59th Floor, District 8, SCBD, Jalan Jendral Sudirman
Kav 52-53, Jakarta, 12190, Indonesia
Treasury Tower, District 8, Lantai 58, SCBD Lot 28, Jl. Jend.
Sudirman Kav. 52-53, Kel. Senayan, Kec. Kebayoran Baru, Kota, Adm
Jakarta Selatan, Prop, DKI Jakarta, Indonesia
Ul. Okunin 1, 05-100, Nowy Dwor, Mazowiecki, Poland
Ul. Wołoska 22, 02-675, Warsaw, Poland
Ulica Grada Vukovara 269d, 10 000 Zagreb, Hrvatska, Croatia
Unit 02, 11/F, Tower A Hedonic Center, 6 Songyue Road, Siming
District, Xiamen, China
Unit 2001, 20/F, Greenfield Tower Concordia Plaza, No. 1 Science
Museum Road, Kowloon, Hong Kong
Unit 401, 4th Floor, Metropolitan Building, No.235 Dong Khoi Street,
Ben Nghe Ward, District 1, Ho Chi Minh City, Vietnam
Unit B01, Room 401, Tower 2, Parkview Green Fang Cao Di, No.9
Dongdaqiao Road, Chaoyang District, Beijing, China
Unit b02-b04, Room 401, Unit 2, Building 9, Dongdaqiao Road,
Chaoyang District, Beijing, China
Unit B06, Room 401, Tower 2 Parkview Green Fang Cao Di, No.9
Dongdaqiao Road, Chaoyang District, Beijing, China
Unit No. 50-8-1, 8th Floor, Wisma Uoa Damansara, 50 Jalan Dungun,
Damansara Heights, 50490, Kuala Lumpur, Malaysia
Unit No. 54, 5th Floor, Kalpataru Square Andheri-Kurla Road, Andheri
(East) Mumbai, Maharashtra, 400059, India
Unit No. 54, 5th Floor, Kalpataru Square, Andheri-Kurla Road,
Maharashtra, Mumbai, 400059, India
Urb. Las Mercedes, Av. Orinoco cruce con Mucuchies Torre Nordic,
Piso 1, Oficina 1 y 2, Municipio Baruta Caracas, Bolivarian Republic of
Venezuela
Vandtarnsvej 83A, 2860, Soborg, Denmark
Via Spadolini 7, 20141, Milano, Italy
Vilniaus m. Olimpiečių g. 1A, Lithuania
Vinohradská 2828/151, 130 00 Praha 3-Žižkov, Czech Republic
Vretenvagen 2, 4th Floor, 171 54, Solna, Sweden
 S T R AT E G I C R E P O R T G OV E R N A N CE
S H A R E H O L D E R I N F O R M AT I O N
Annual General Meeting
Our AGM will he held on Friday 28 May 2021 at 3.00pm at 103-105 Bath
Road, Slough, Berkshire, SL1 3UH.
The Notice convening the meeting, together with the business to be
considered at the meeting, is contained in a separate document for
shareholders and is available on our website at www.reckitt.com.
2021 Financial calendar and key dates shareholders; and
Announcement of Quarter 1 trading statement 28 April 2021
Annual General Meeting 28 May 2021
Record date for 2020 final dividend 7 May 2021
Payment of 2020 final ordinary dividend 14 June 2021
Announcement of 2021 interim results 27 July 20211
Record date for 2021 interim dividend 6 August 20211
Payment of 2021 interim ordinary dividend 14 September 20211
Announcement of Quarter 3 trading statement 26 October 20211
1. Provisional dates
Dividend
The Directors have recommended a final dividend of 101.6 pence per
share, for the year ended 31 December 2020. Subject to shareholder
approval at the 2021 AGM, payment of the final dividend will be made on
14 June 2021 to all shareholders on the register as at 7 May 2021. The
latest date for receipt of new applications to participate in the Dividend
Reinvestment Plan (DRIP) in respect of the 2020 final dividend is 21 May
2021. Details on how to join the DRIP can be found below.
Mandatory direct credit
In September 2018, we changed the way we pay dividends to
shareholders and no longer pay dividends by cheque. This is known as
‘mandatory direct credit’. The reasons and benefits for introducing this
change are:
• shareholders receive dividend funds quicker;
• we reduce our environmental impact;
• we reduce the risk of cheque fraud; and
• we reduce the administration costs of issuing or banking cheques.
To have your dividends paid directly into your bank account, please log
on to the Computershare Investor Centre at www.investorcentre.co.uk,
or by telephone on +44 (0)370 703 0118. We will hold your dividends for
you until you provide valid bank details and charges may be applied to
reissue any dividend payments.
If you are based overseas, you may choose to have your dividends paid
to your account in your local currency by using Computershare’s Global
Payment Service (GPS). To view the terms and register to the GPS,
please visit www.computershare.com/uk/investor/GPS. If you wish to
reinvest your dividend to buy more shares, please join our DRIP.
Dividend Reinvestment Plan (DRIP)
Shareholders participating in the DRIP receive additional shares
purchased in the market instead of receiving a cash dividend. You can
elect to join the DRIP by registering at the Computershare Investor
Centre at www.investorcentre.co.uk. Alternatively, you can request a
DRIP mandate form and terms and conditions by contacting
Computershare on +44 (0)370 703 0118.
Reckitt Annual Report and Accounts 2020
F I N A N C I A L S TAT E M E N T S
Electronic shareholder communications
We encourage all shareholders to receive an email notification when
shareholder documents become available online, to reduce our impact
on the environment. An election to receive shareholder communications
in this way will:
• result in annual cost savings to the company since less paper
documentation will need to be produced and posted;
• allow for quicker and more effective communications with
• support Reckitt’s corporate responsibility profile.
Shareholders can register their email address at www.investorcentre.
co.uk/etreeuk/ReckittBenckiser. For each new shareholder that does so,
Computershare will donate £1 to the Woodland Trust. For more
information on the Woodland Trust and all of their campaigns please visit
their website at www.woodlandtrust.org.uk.
Shareholders who have positively elected for electronic communications
will receive an email whenever shareholder documents are available to
view on the company’s website. Shareholders who have elected by
deemed consent in accordance with the Companies Act 2006 will
receive a hard copy notice of availability of a document on the
company’s website and are entitled to request a hard copy of any such
document, at any time, free of charge from Computershare.
Shareholders can revoke their consent to receive electronic
communications at any time by contacting Computershare.
The company’s 2020 Annual Report and Notice of the 2021 AGM are
available to view at www.reckitt.com. The Investor section of the
website also contains up-to-date information for shareholders to view
throughout the year, including:
• detailed share price information;
• financial results;
• regulatory announcements;
• dividend payment dates and amounts;
• access to shareholder documents including the Annual Report and
Notice of AGM; and
• share capital information.
Share dealing facility
The company’s shares can be traded through most banks, building
societies, stockbrokers or ‘share shops’. In addition, UK-based
shareholders can buy or sell Reckitt shares using a share dealing facility
operated by Reckitt’s Registrar, Computershare; these include internet
and telephone share dealing.
Internet share dealing
Internet share dealing is available to shareholders residing in the UK. This
service offers shareholders a straightforward way to buy or sell Reckitt’s
shares on the London Stock Exchange. The commission is 1%, subject to
a minimum charge of £30. In addition, stamp duty, currently 0.5%, is
payable on purchases. Real-time dealing is available during UK market
hours (08:00 to 16:30). In addition, there is a facility to place your order
outside of market hours. Up to 90-day limit orders are available for sales.
To access the service, log on to www.computershare.trade/.
Shareholders must have their Shareholder Reference Number (SRN)
available. The SRN appears on share certificates. Internet share dealing is
currently limited to certain jurisdictions: a full list of countries can be
found on the Computershare website at www.computershare.trade/
cert_faqs.html; scroll down to the section, ‘Using the service’ and then,
‘Am I eligible to register for the service?’.
237
 S H A R E H O L D E R I N F O R M AT I O N C O N T I N U E D

Telephone share dealing ADR Depositary Bank

Telephone share dealing is available to shareholders residing in the
UK. The service is available Monday to Friday, excluding bank holidays,
from 08:00 to 16:30 by contacting Computershare on +44 (0)370 703
0084. The commission is 1%, plus £50. In addition, 0.5% stamp duty
is payable on purchases; a full list of fees can be found online at
www.computershare.trade/costs.html. To access the service,
shareholders must have their SRN to refer to during the call. Shareholders
should also have a debit card to make purchases over the telephone.
J.P. Morgan Chase Bank, N.A. sponsors and administers the Reckitt ADR
facility. J.P. Morgan ADR shareholder services can be contacted as follows:
J.P. Morgan Chase Bank N.A.
383 Madison Avenue, Floor 11, New York, NY 10179
Online via: www.shareowneronline.com
Telephone number for general queries: Tel: +1 800 990 1135
Telephone number from outside the US: Tel: +1 651 453 2128

Telephone share dealing is offered on an execution-only basis and no Company Secretary

recommendation can be made with respect to buying, selling or holding Rupert Bondy
shares in Reckitt. Shareholders who are unsure of what action to take
should obtain independent financial advice. It is also important to note Registered office
that share values may go down as well as up, which may result in a 103-105 Bath Road, Slough
shareholder receiving less/more than originally invested. Berkshire SL1 3UH
Telephone: +44 (0) 1753 217800
As a consequence of the UK leaving the European Union on 31 December Registered and domiciled in England and Wales No. 6270876
2020, the share dealing service offered through Reckitt’s Registrar is
unfortunately no longer available to customers with certificated Company status
shareholdings based in the European Economic Area. Public Limited Company

Detailed terms and conditions for both internet and telephone dealing Auditor
are available upon request by calling +44 (0)370 702 0000. KPMG LLP

Analysis of shareholders as at 31 December 2020 Solicitors

Slaughter and May/Linklaters LLP
No. of
Distribution of shares by type of shareholder holdings Shares Registrar and transfer office
Nominees and institutional investors 5,529 727,017,817 The company’s Registrar, Computershare, is responsible for maintaining
Individuals 11,254 9,517,362 and updating the shareholder register and making dividend payments to
shareholders. If you have any queries relating to your shareholding please
Total 16,783 736,535,179 write to, or telephone, the company’s Registrar at the following address:

No. of Computershare Investor Services PLC

Size of shareholding holdings Shares The Pavilions, Bridgwater Road, Bristol BS99 6ZZ
1 – 500 10,159 1,891,137 Reckitt Shareholder helpline:
501 – 1,000 2,469 1,797,027 Telephone: +44 (0)370 703 0118
1,001 – 5,000 2,468 5,137,687 Website: www.computershare.com/uk
5,001 – 10,000 339 2,422,264
Charity donation
10,001 – 50,000 640 15,594,200
ShareGift is a UK registered charity (No.1052686) which specialises
50,001 – 100,000 206 14,787,743
in realising the value locked up in small shareholdings for charitable
100,001 – 1,000,000 391 127,810,538 purposes. The resulting proceeds are donated to a wide range of
1,000,001 and above 111 567,094,583 charities, reflecting suggestions received from donors. If you have only
Total 16,783 736,535,179 a small number of Reckitt shares which are uneconomic to continue
holding, you may wish to consider donating them to ShareGift. Please
American Depositary Receipts visit www.sharegift.org/donate-shares/ or telephone +44 (0)20 7930
American Depositary Receipts (ADRs) are dollar-denominated securities 3737 for more information about how to proceed. Further details about
that represent the ownership of ordinary shares in a non-US company, ShareGift can be found at www.sharegift.org.
quoted and traded in US dollars in the US securities market. ADRs
facilitate the purchase, holding and sale of non-US shares by US Unsolicited mail
investors. Dividends are paid to investors in US dollars. We are legally obliged to make our register of shareholders available
to the public, subject to a proper purpose test. As a result, some
Reckitt Benckiser Group plc ADRs are traded on the over‑the‑counter shareholders might receive unsolicited mail. Shareholders wishing to limit
market (OTC) under the symbol RBGLY. Five ADRs represent one ordinary the amount of such mail should write to the Mailing Preference Service,
Reckitt share. J.P. Morgan Chase Bank N.A. is the Depositary. The table MPS FREEPOST 29 LON20771, London W1E 0ZT or register online at
below provides details of the identification of Reckitt securities on the www.mpsonline.org.uk.
US market place and the London Stock Exchange.

Symbol Security Listing/Trading CUSIP/ISIN

RBGLY U.S. security (ADR) OTC Pink 756255204

RB. Ordinary share London Stock Exchange GB00B24CGK77

238 Reckitt Annual Report and Accounts 2020

 S T R AT E G I C R E P O R T G OV E R N A N CE
Share fraud and ‘Boiler Room’ scams
Share fraud is a deceptive practice that induces investors to make sales
and purchases based on inaccurate information and in violation of
security laws. In Boiler Room scams, fraudsters will entice investors into
scams through increased persuasion and high-pressure tactics through
cold calling or random contact.
Reckitt is aware of these deceptions and urges shareholders who are
offered unsolicited investment advice, discounted shares, a premium
price for shares, or free company or research reports to investigate
thoroughly before making any decision.
If you receive any form of unsolicited investment advice, please take the
following steps:
• confirm the name of the person and/or organisation;
• check the Financial Conduct Authority’s (FCA) Financial Services
Register at https://register.fca.org.uk/ to ensure they are authorised;
• use the details on the Financial Services Register to contact the firm;
• call the FCA Consumer Helpline on +44 (0)800 111 6768 (freephone) or
0300 500 8082 (from the UK), if there are no contact details on the
Register or if they are out of date;
• search the FCA’s list of unauthorised firms and individuals at www.
fca.org.uk/consumers/unauthorised-firms-individuals to avoid doing
business with reported offenders;
• if you are approached by fraudsters please contact the FCA using
their helpline, or share fraud reporting form; and
• consider getting independent financial advice.
Using an unauthorised firm to buy or sell shares or other investments will
prohibit access to the Financial Ombudsman Service or Financial
Services Compensation Scheme (FSCS) should the investment be
unsuccessful. Remember: if it sounds too good to be true, it probably is.
If you think you have been a victim of these scams, the matter should be
reported to the Police and to Action Fraud. For more information, please
visit the Serious Fraud Office website at www.sfo.gov.uk/contact-us/
reporting-serious-fraud-bribery-corruption/.
Reckitt Annual Report and Accounts 2020
F I N A N C I A L S TAT E M E N T S
Cautionary note concerning forward-looking statements
This Annual Report and Financial Statements contains statements with
respect to the financial condition, results of operations and business of
Reckitt (the Group) and certain of the plans and objectives of the Group
that are forward-looking statements. Words such as ‘intends’, ‘targets’,
or the negative of these terms and other similar expressions of future
performance or results, and their negatives, are intended to identify such
forward-looking statements. In particular, all statements that express
forecasts, expectations and projections with respect to future matters,
including targets for Net Revenue, operating margin and cost efficiency,
are forward-looking statements. Such statements are not historical facts,
nor are they guarantees of future performance.
By their nature, forward-looking statements involve risk and uncertainty
because they relate to events and depend on circumstances that will
occur in the future. There are a number of factors that could cause actual
results and developments to differ materially from those expressed or
implied by these forward-looking statements, including many factors
outside the Group’s control. Among other risks and uncertainties, the
material or principal factors which could cause actual results to differ
materially are: the general economic, business, political and social
conditions in the key markets in which the Group operates; the ability
of the Group to manage regulatory, tax and legal matters, including
changes thereto; the reliability of the Group’s technological infrastructure
or that of third parties on which the Group relies; interruptions in the
Group’s supply chain and disruptions to its production facilities; the
reputation of the Group’s global brands; and the recruitment and
retention of key management.
These forward-looking statements speak only as of the date of this
Annual Report and Financial Statements. Except as required by any
applicable law or regulation, Reckitt expressly disclaims any obligation or
undertaking to release publicly any updates or revisions to any forward-
looking statements contained herein to reflect any change in the Group’s
expectations with regard thereto or any change in events, conditions or
circumstances on which any such statement is based.
Any information contained in the 2020 Annual Report and Financial
Statements on the price at which shares or other securities in Reckitt
Benckiser Group plc have been bought or sold in the past, or on the yield
on such shares or other securities, should not be relied upon as a guide
to future performance.
239
 N OT E S

240 Reckitt Annual Report and Accounts 2020

Reckitt Benckiser Group plc
Registered office
103-105 Bath Road,
Slough, Berkshire, SL1 3UH
Registered in England and Wales
No 6270876

reckitt.com